The future of data management platforms in the era of CDPs

Asked to list the hottest categories in martech, you might mention customer data platforms; you might mention identity resolutions platforms; perhaps data clean rooms.

Have DMPs been around so long we just take them for granted (like “big data”)? Will an increasing reliance on first-party data managed through CDPs, plus all the privacy issues surrounding third-party data, conspire to make DMPs extinct?

Data management solutions vendor Lotame is betting against that. But it’s also going out of its way to position itself as a partner for CDPs.

Past and future

Alex Theriault, general manager of Lotame’s latest solution suite Spherical, began with a look in the rear-view mirror. “Lotame has worn a few different hats over the years. We initially came out as an ad network selling data and audiences. That was back in 2008. We were one of the first DMPs coming to market in 2011.” Through an aquisition, they expanded into the cross-device and full identity resolution space, and they also offer one of the largest global data marketplaces, the Lotame Data Exchange.

But with the fast-paced adoption of CDPs, accelerated by customers moving more decisively into digital during the pandemic, Lotame faced a question about its future identity. That led, said Theriault, to a lot of research.

An identity crisis

The research focused on the evolving CDP space the use cases CDPs are best-suited to serve. “Do we become a CDP like so many other companies? Or is our technology still highly in demand and future-proofed so we can navigate third-party cookie restrictions and privacy regulation changes?” These were the kinds of questions to be faced, said Theriault.

The answer was that the demand for the kind of functionality that has historically lived within a DMP would persist: “Such as access to third-party data, built-in analytics, modeling capabilities, and really mature pipes into the adtech ecosystem,” Theriault explained.

The role of CDPs is critical when it comes to managing and activating data volunteered by known customers or known site users. That leaves a gap, said Theriault, when it comes to targeting people who make it to the site, perhaps put something in their cart, but never execute a one-time buy or sign up for a subscription.

What a DMP can do

Just because third-party cookies are one day going away, that doesn’t mean an end to third-party data.

“Third-party data and third-party cookies are often conflated with one another,” Theriault explained. “Any company that has an identity graph — and Lotame is one of those; there’s definitely a handful of strong players in the space — is able to collect data in environments where third-party cookies are not accessible, whether it’s attached to a first-party cookie, or other digital identifiers such as CTV IDs or customer IDs. It was historically a probabilistic graph, but we’ve now expanded it to being a hybrid; so we can ingest data tied to email,” in other words, first-party data. “So we’ll support both a declared match as well as a probabilistic match.”

Theriault suggests that tracking third-party data using Lotame’s Panorama ID can be more effective than relying on third-party cookies. “We’ve run case studies in environments like Safari that are already third-party cookie-restricted that have improved on results brands have seen running campaigns on third-party cookies.”

What a DMP and CDP can do together

The outstanding question is how DMPs and CDPs can work in harmony to support brand marketing strategies. One way is through simple integration. Some CDPs — for example Segment, Tealium and mParticle have on-page tags (or pixels) on brand websites. “With Lotame also having a tag on page,” said Theriault, “there’s really easy connectivity. We let the CDP do the majority of hard work to gather the fragmented, siloed first-party data from different sources and prepare it, segment it, [and] sanitize it within the CDP.”

The Lotame tag for the same brand can do a “quick look-up” that distinguishes known customers (with customer IDs) from unknown visitors where information is limited or absent.

“In the instance the brand doesn’t have a customer ID, then we fill that void; so we would be creating a profile within our platform and start the brand being better able to understand these cart abandoners and pushing that information back to the brand.”

This is all happening through the recently introduced Spherical solution, billed as a first-party data accelerator.

The workflow between Spherical and partner CDPs is (at least) bi-directional. CDPs collect first-party data across channels, from offline, email and mobile, to web visits and CTV. It cleans and segments the data and pushes it to Spherical for analysis, enrichment and modeling based on Lotame’s DMP resources. Spherical can push the result audiences to adtech solutions or to social media pipes. Conversely, Spherical can send campaign data like clicks and impressions to the CDP.

Another layer in the stack?

One might expect to see pushback against this proffer from customers that have invested time and money in a CDP and perhaps also use a DMP. Theriault acknowledges this. “We really wanted to appeal to brands and agencies, so we’ve actually introduced a variable model that supports things like seasonality and — for an agency — the ability to test and learn and iterate with different brands and not be locked into minimum monthly fees. “We can just plug in and fill the gaps because we’re not trying to sell them an end-to-end platform.”

The benefits of all this connectivity, Lotame would say, lies in bringing data on known and unknown customers, deterministic and probabilistic data, together. Whether this is the future direction for the DMP space or whether brands will increasingly turn their backs on third-party data and market to their known audiences, remains to be seen.