The Future of Database Marketing – Is It Dead?

The Future of Database Marketing - Is It Dead?

Do we even know what we are referring to when we say “marketing database” these days?

The developments and revolutions in marketing were and are relentless. What was once the marketing database has evolved as marketers introduced customer data platforms (CDPs) and new ecosystems of activation platforms.

Perhaps the rise of CDP brought with it a feeling that marketers were finally mastering first-party data – sourced from their corporate systems and lakes of operational data – and finally making strides in managing customer interactions.

But much remains to be done. Changes affect how marketing is defined and how brands work. Growing privacy concerns are driven by both consumer sentiment and well-intentioned regulators. The ability to deliver personalized customer experiences is constantly being challenged as consumers get used to more personalized interactions. Businesses are moving from managing campaigns to managing travel. The death of the third-party cookie has eliminated the older tricks some marketers use.

Marketers have adopted CDPs quickly and are slowly scaling them up, one use case at a time. The traditional focus on CDPs derived from first-party data has limited their functionality in prospecting, collecting third-party data, and integrating second- and third-party data. Finding more relevant ways to reach out to prospective customers is vital as third-party cookies are disappearing and focusing not only on first-party audiences but also on the ability to attract new customers.

Many CDPs perform poorly (or not at all) when it comes to data cleansing. The CDP does not enrich data with new dimensions outside of the dimensions it directly collects, thereby limiting the number of insights and analyzes that can be gained through it.

The marketing database as we know it is dead, so to speak. But what takes its place has to be much bigger and do very different things. CDPs and indeed the marketing data and tool environment as a whole are not keeping up.

As the role of marketing grows, IT departments struggle to keep up and do not solve all marketing needs. For example:

  • Most enterprise data platforms (EDPs) focus on financial, transactional, and operational data, but do not create the segments and personas necessary for effective marketing. However, CDPs are not built to contain all of the data necessary for marketing. First party data is not enough. A tool must contain connections to third-party and third-party data, such as: B. the ability to use third party data to create similar audiences.
  • Typical computing use cases focus on the needs of the enterprise data warehouse and the CDP cannot manage all of the data processing required to transition from marine constructs to consumption data objects. Retrieving large amounts of historical and transaction-level data can create the right segments / personas for the CDP to use in real time. However, these segments can be lost between the Enterprise Data Lake and the CDP as neither is focused on this capability.
  • CDPs are used to operationalize data. You therefore only focus on current customer profiles and rarely on historical events. This limits the views necessary for examining complete insights into marketing performance and identifying trends over time.
  • Most CDPs do not solve use cases for integration with adtech systems and also have difficulty creating complex outbound extracts. Many large established companies still rely on powerful and direct mail campaigns that require complex outbound extract capabilities.
  • Most CDPs do not focus on maintaining the appropriate metadata needed to efficiently increase knowledge and analytics in quality marketing. Such data is critical to demonstrating the channel value and measuring related KPIs.

The shortcomings common to most CDPs limit a marketer’s ability to effectively respond to changes in customers and in the marketplace. New functions are required.

Beyond the traditional marketing database: The target group level

For most (even advanced) organizations, the CDP will struggle to support more than a few simple use cases as it is not scalable due to a lack of data management capabilities. That’s how we put them Audience data layer.

The target group level introduces new data functions into the modern data management platform. It focuses on pulling transactional data from your corporate data platform into a real people view (as opposed to a collection of facts). It provides a place to enrich customer data (e.g. add demographic data, economic data, sentiment data) and add potential customers from third-party and third-party sources. The audience level can provide analytics on the marketing and sales performance of Adtech and Martech and provide predictive models, personas, and segments to influence marketing.

From there, the CDP becomes much more useful in the campaign and travel management business. Faster processing of less data can provide a real-time customer profile, create a more detailed segmentation of customers, and link online behavior to customer profiles. This will feed the activation platforms on which outgoing messages are executed, e.g. B. Adtech platforms, paid social networks, direct mail, sales people, etc.

The audience level addresses some of the shortcomings identified earlier:

  • Not only ingesting first-party data, but also connecting to third-party data
  • Performing the correct level of compute required to switch to consumption data objects
  • Build deeper insights and trends in marketing performance over time by drawing on a fuller representation of historical events
  • Improving the ability to target media and complex outbound extracts
  • Providing the metadata needed to efficiently drive marketing insights and analytics

In short, the audience level prepares, expands, and complements the data to make the segmentation and marketing decision-making capabilities of the CDP much more useful and powerful.

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A solid data strategy is required before implementing a CDP or when faced with scaling issues. You likely need expertise that your marketing reps (let alone your IT department) can’t find. The first step is to develop a deeper understanding of what the audience level can do to capitalize on your CDP by setting the right strategy and plan, and finding the right resources to execute.

It’s okay if the marketing database in its traditional form is dead. In order to live, grow, and thrive, the database – and the entire marketing ecosystem – must ultimately be reborn into something new.

More MarketingProfs resources on database marketing

The five data management practices B2B marketers overlook

Three key investments to improve marketing investments and accountability

The state of the B2B marketing data