Data management platforms face an existential hurdle as third-party cookies begin to disappear. So what does the future hold for DMPs without cookies?
DMPs allow organizations to collect large amounts of customer-centric data for online marketing and advertising. Historically, they depend on third-party data, so cookie privacy issues threaten the future of DMP. Marketers may wonder how DMPs can evolve and stay relevant as third-party cookies go away.
The evolution of DMPs
A DMP is one of the most powerful tools in the marketing stack because it allows campaigns that divide consumers into clearly defined audiences to enhance targeted messaging. Organizations that don’t use customer data at this level are at a competitive disadvantage.
DMPs store customer information: demographics, purchase history, likes and dislikes. Data pipelines that collect information from webpage visits, registration forms, and other online sources populate the DMP’s repository, and then marketers can analyze the data and send each customer the good posts.
As big data has matured, so has DMP. Although it existed in various forms before the Internet, DMP took off with cloud technology. Cloud environments enabled cost-effective mass storage that greatly expanded the capacity of DMP and made it affordable for small organizations.
The role of cookies in DMPs
Despite the advantages of DMP technology, it faces a major challenge. It depends on third-party data.
Specifically, a DMP uses third-party cookies to track customer viewing and browsing habits. Most digital advertisements use tracking cookies, so any website that loads code from a third-party server can access this data. Access to third parties means that customer data can end up with companies they don’t know.
Third-party cookies differ from cookies that an organization may set. These are between the client and the website they have accessed; the former can be sold to the highest bidder. This system worked well for marketers over time until many customers started deleting third-party cookies due to privacy concerns.
Google plans to eliminate third-party cookies and address privacy issues globally, while Apple and Mozilla have made changes to drop this support. This change is both a trend and a compliance issue, as GDPR and CCPA regulations have introduced new consumer rights and trade restrictions. However, the abandonment of cookies threatens the future of DMPs.
What future for DMPs?
However, the DMP can survive this seismic change. DMP vendors have a few solid paths to follow, such as changing data sources and creating new data pipelines.
Use first party data
Third-party cookie barriers don’t affect first-party data, so marketers can refocus on the latter, which is also more reliable. DMPs collect and analyze first-party data anyway, so vendors can improve their usability, refine the customer journey, and improve CX to bolster the amount of data and insights collected.
Marketers should seek first-party data in any case. Its benefits include improvements in how the organization reaches, engages and converts customers. Direct contact and online engagement provides stronger data on customer likes, dislikes, and behaviors, making it easier to improve the customer experience.
Build new pipelines
If Google drops third-party cookies, the customer data pipeline changes. Data in the DMP would take different routes. DMP vendors need to diversify sources of information and unify data into a more comprehensive customer view. For example, DMPs could leverage web, point-of-sale, and mobile data, and enrich data through online CX and offline demographic sources to fill in the gaps.
Focus on value exchange
The future of DMPs depends on improving CX on company sites, which includes explaining why the site collects customer data. Organizations need to be upfront and offer customers something in return for their data, rather than trying to stealth information. CX teams can personalize the online experience and ask what would make customers comfortable, then deliver it quickly.
The integration of identification and consent in CX offers marketers individual targeting. When the site identifies and interacts directly with the customer, marketers can send a message more dynamically based on the customer’s priorities during engagement.
Build a walled garden
DMP providers can enable a walled garden approach, i.e. publisher-driven audience targeting that treats customers as if they all want to be there, without subtle steering. In a post-third-party cookie world, brands with a large footprint based on direct customer engagement will have the best understanding of customer identity. DMPs with first-party data can make marketers stronger than ever.