Commentary

CPGs Must Own Their Customer Relationships; CDPs Aren't The Answer

Facebook and Google together have pulled a lot of rugs out from under marketers over the past several months — and perhaps no one is hitting the ground quite as hard as CPG marketers. 

In March, Facebook announced that it would be shutting down Partner Categories in an effort to purge third-party data-based targeting from its ecosystem in the wake of the Cambridge Analytica drama. Meanwhile, in a series of quieter but no less monumental moves, Google announced stringent new restrictions on the use of the DoubleClick ID when leveraging its data transfer service, also suspending third-party ad serving and pixel tracking on YouTube.

In short, it just got a whole lot harder to leverage third-party insights inside Facebook and Google … and CPG marketers are feeling a disproportionately intense sting. After all, by the very nature of their products, CPG brands tend not to have a direct relationship with their consumers: in the absence of their own CRM files, they’ve relied heavily on Facebook’s built-in third-party capabilities, as well as the ability to pull data out of Google for cross-platform reporting and measurement. As a result, CPG marketers now find themselves stuck with a heavily constrained third-party ecosystem, facing severe limitations on how and where syndicated segments can be activated.

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Facebook and Google’s actions bring into stark relief the enormous risks inherent in intermediation by walled gardens. The more they continue to wall themselves off, the less brands can rely on them to serve as conduits to the consumer population. 

With it harder than ever to gain an independent view of the data generated from ad buys within the Facebook and Google ecosystems, CPG marketers must instead operate in a new reality if they are to survive. They must take control of the customer relationship, as well as all the data that emanates from its various touchpoints.

Enter the Customer Data Platform (CDP)? Not so fast

The process begins by activating around a new standard of best practices when it comes to owning and operating a proprietary first-party data asset. This desire to get closer to the customer isn’t a new one, though the introduction of the GDPR data protection lawand the corresponding moves by Facebook and Google in the name of privacy are certainly forcing the issue. 

Over the past couple of years, the industry has become increasingly infatuated with the newly created CDP category, which purports to offer a consolidated view of a consumer across devices, mainly based on a brand’s first-party data. Unfortunately, CDPs don’t deliver on the promise of customer identity in a way that will ease the lives of beleaguered CPG marketers. 

That’s because CDPs are de facto walled gardens that essentially lock marketers into an ID that isn’t compatible with other systems. This means that every campaign must be built from scratch through connections with third-party platforms, a limitation that runs contrary to the entire value proposition of identity resolution — specifically, maintaining a personalized experience throughout the lifetime of the customer relationship. 

Going forward, it will be critically important for CPG marketers to own and operate their own proprietary ID graphs — portable graphs that learn and improve at each touchpoint with third-party segments. As GDPR brings even further constraints to third-party data and behavioral targeting, such proprietary graphs will become increasingly important investments — a model of stability in a marketplace where brands can no longer rely on platforms or outside vendors to manage their one-to-one customer relationships without pulling the rug out from under them.

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