"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Victor Wong, CEO at Thunder.
Many years ago, customer relationship management (CRM) platforms solidified their position as the systems of record for customer interactions and introduced the concept of data-driven marketing by providing the first database of customer information for tracking and targeting purposes.
However, in the last few years, you might have guessed that the hottest new category of marketing technology – the data management platform (DMP) – was going to completely own the process of targeting messages to customers digitally. The news late last year that Salesforce, the quintessential CRM software seller, was buying Krux, an upstart DMP, would seem to solidify the DMP’s position as MVP in data-driven marketing.
Until recently, many marketers believed the CRM platform’s main role in targeting was to simply input data into the DMP. When it came to controlling audience targeting, marketers expected the DMP to be in the driver seat and the CRM platform to be a passenger. Believing that would be a mistake.
No doubt, the DMP changed the game. Before it, you couldn’t easily track and segment unregistered users. You couldn’t build new segments of customers and find lookalikes from the data points that create a user profile and audience segment. You couldn’t easily personalize the web and ad experience for people you essentially didn’t know.
That said, the DMP matured in the age of the open web – a time before the dominance of the walled gardens of Facebook, Twitter and others. In the open web, everyone was free and able to track and share information on users across most of the digital media they consumed. As a result, the DMP was able to create one view of the targeted user on most digital media.
Now, there are two views of the customer: within the walled gardens and outside the walled gardens.
Facebook and Google limit advertisers’ ability to track and add data about customers who cross the wall for both consumer privacy and business protection reasons. As a result, marketers cannot follow their unregistered users into the walled garden with their DMPs, and they also cannot take the data out of the walled garden about the user and store it for use elsewhere. Marketers have never known so much about a customer – yet they may never have had such a fragmented view.
Re-enter the CRM platform. It has increasingly taken on the role of the DMP for walled-garden audience targeting. The only difference other than what media you’re using the data for is what you can or cannot get out.
In many ways, the CRM platform is sending information down a one-way street with the walled gardens. The only takeaways are media results provided by the walled-garden publisher and whatever data points that can be gleaned from targeted users crossing back out to the open web.
Despite these limitations, marketers are still uploading their most valuable first-party data to walled-garden media publishers: their CRM data on registered prospects and customers. They do it to just to be able to target “custom audiences” of their registered users with specific ads within the walled gardens. They’re also uploading CRM data to build lookalike segments based on the walled gardens’ data on the same customers to expand advertising based on who they know to be good customer.
Outside of walled gardens, CRM data is now being onboarded into DMPs to also create targetable customer segments on the open web. In effect, only the CRM platform can power a brand’s targeting everywhere. Very few marketing technologies can truly play cross-channel and inside/outside walled gardens, but the CRM platform is one of them. It is now displacing, or at least filling in for, the DMP in an increasing number of situations.
With digital ad spend growth largely accruing to the likes of Facebook, Google, LinkedIn, Pinterest and other walled gardens, it’s a sure bet the CRM platform is going to increasingly power people-based marketing for years to come.
CRM is dead, long live CRM!