Strategic audience management in a CDP-driven marketing ecosystem

As promised in my last blog post, several new topics need to be discussed in the domain of customer database platforms (CDPs): The overarching target operating model to pursuit a more agile marketing approach, the new way of multi-layered planning, and for sure the smart KPI framework to measure actuals and success. They will be part of future blog posts promised!

Today, as said last week, let's have a closer look at how to set up audience management in a CDP-driven ecosystem. And why there is a difference btw. optimizing the nature of a lane of traffic in case you know or don't know the drivers of the cars.

My educated guess is, that we are all a bit annoyed by the endless PowerPoint of Personas like "This is Paul, he is interested in a new car!". Or the fact that phrases like "Gen Z are our new high potential reach target" are written into your yearly strategic marketing key-note within a few seconds - to finally pull or find them into your ecosystem is not that easy.

Return on experience (ROX) - nicely said, tough to measure

Over the last few months more and more the answer of the top management is: "we need a customer database platform (CDP) - this will help us to dig into the 1st party data ecosystem and a way to better reach and target audiences".

This might be true, but in a data-driven marketing environment, the holy grail is to show the evidence in real numbers and return on marketing investments. As ROMI is just the money we invested into marketing in comparison to the gained return we just need to define the measures for both a bit more precisely and we are done!

Marketing is no longer a pure waterfall game of defining a budget, pitching the best agency, and running a big campaign optimized against one single KPI. Today multiple organizational units in the marketing departement are orchestrating experiences on the full set of all touch-points. As discussed in the last blog post activation on all paid, owned, and earned touchpoints is a competitive advantage and without this you have a coffee but not mug.

This means to calculate the good old ROMI we need to divide the success of the designed customer experience by all associated costs. Once we have calculated the return, we can aggregate all experiences towards a total sum - that's it, that's all. The two new open questions that arisis are the way how we like to measure the experience success and later aggregate all experiences.

To first focus on the second one, here we see the lack of another fundamental system in the marketing space. A marketing planning cloud that allows us to plan (time, budget, scope, audiences) all the activations within campaigns and programs and plans. This four-fold layered approach helps us to start on top with different marketing plans and a rough milestone planning in the form of the marketing programs. The campaigns and activations represent the above-mentioned experiences, independent of whether they are trigger-based always-on journeys or push-based temporary activations.

Each experience itself is a journey through our marketing funnel. Success means the conversion from one funnel layer to the next. In the easiest AIDA model three basic conversions. For sure there are far better ones - part of another blog post about smart KPI frameworks.

To wrap-up this means: ROX or ROMI can be calculated if the Marketing Ecosystem is structure on a clear taxonomy and planning cloud. Here we can pull the campaigns, journeys and activations defining an experience and also the associated costs to run our easy math.

Two views on the same topic - Experiences and Profiles

Once we have a KPI we can start optimizing this into small sprints in an agile marketing operating model. This brings me back to the initial question, what is the benefit of a CDP? If we compare the experiences with a huge pipe system, we need to have a closer look on he liquids running through. The fluid ingredients into these modeled experiences are single profiles with attributes and scores used as triggers and to reach them individually based on their past actions.

The CDP helps us now to go away from optimizing the experience on CTRs, video views, and bounce rates. These measures just open our analytics view on the areas where people are more likely to convert and where they prefer to jump out. In a second step, the profiles with hundreds of attributes can now be used to have a deeper look into the people behind and the why. We have now two ways to optimize our return on experience - (1) the design itself and (2) the profiles (segments) we push through. This is similar to a street, without knowing anything about the people driving the cars, you need to put a lot of speed limits before each corner and crossings. Once we know that there are standard drivers and race drives, we might clone the first experience and remove the speed limits for all race drivers!

The effect is in selected experiences a factor 10 for the efficiency (single conversions) and three times better return on experience (ROX).

Strategic Audience Management - bringing the two worlds together

To find the most promising segments of drivers on our streets, we need to do three things. (1) Fill the funnel on top with (new) profiles and (2) in the mid and lower-funnel use analytics & AI to cluster the segments to best fit our experiences and recommendations. (3) On top of that, we should not forget to still have a view on the experience itself (CTR, bounce, ...) as even the best driver is not able to pass a 90° curve with 200 mph.

By doing this, we end up in the following holistic target operating model for data-driven and agile marketing.

1. Top-down taxonomy and planning via marketing plans and programs is defining the overarching structure of all our planned campaigns, journeys, and activations. Here we will find the "Pauls of the world" and the decomposition to target groups, the planned budgets & media mix, etc. within the marketing programs. Also the strategic goals we'd like to reach with our future experiences. All based on a marketing planning cloud.
2. Agile design, implementation, and optimization of the best fitting experiences via targeting, personalization and recommendation on all paid, owned and earned channels.
3. Top-Down Reach generation in the upper funnel with mainly push-driven campaigns using contextual and behavioral (re-) targeting and look-a-like models based on the existing CDP platform.
4. Bottom-Up journey design and optimization using analytics and AI-driven segmentation based on the CDP platform via 1:1 personalization plus next best actions on all paid, owned, and earned touchpoints.
5. Close the loop: Data & Analytics for the experience design (CTR, bounces) and the most promising segments and profiles (MTA, CLV, NPS, ...). And finally the return on experience ROX to start your next planning cycle.