Assemble, activate, analyze: 3 steps to total data control with composable CDP

Today’s most innovative companies are looking to gain a competitive edge by extracting value from a critically valuable asset: their first-party data. That’s, in part, because the regulatory landscape and other factors are limiting the availability and use of third-party data (which they’ve long and heavily relied on to inform decisioning) across jurisdictions. To do it, you need the most secure, flexible and adaptable of data management tools — and fortunately, it’s quite doable, especially using composable, next-generation customer data platforms (CDPs) like Lytics.

Together with our partner Actable, we recently hosted a webinar (that’s now available to watch on demand!) detailing the three key steps to ensuring complete, end-to-end data control with composable CDPs.

Here’s a look at some the tips and tricks our experts recommend when it comes time to assemble, activate, and analyze your high-value customer data.

Why do you need a CDP?

A customer data platform, or CDP, is a software platform that collects, analyzes and uses data from multiple sources to create unified single profile views of customers. By using data available from myriad sources, and both structured and unstructured information, a CDP can solve one of marketing’s most complex challenges. The CDP ensures that a brand has the best, most comprehensive and detail-rich profile for better segmented, messaging and personalization.

Because of the increasing restrictions on the use of third-party data, marketers need to wring every drop of value they can from first-party data. That’s where an effective CDP can play a critical role, with capabilities that:

• Connect data and identity
• Build and store unified profiles
• Segment and discover audiences
• Activate data to the ecosystem

While older, legacy CDPs can attempt to achieve those critical tasks, there are limitations still at play that next-gen CDPs can overcome.

What changes have led to the need for a next-gen alternative?

Marketers today face dramatic disruptions to how they work, how customers behave and expectations. Here’s a look at four key changes that have occurred in the last decade:

• Privacy and data residency. In recent years, more regions have passed laws that guide what companies can do with customer data, including its collection, storage, use and sale. In addition, major online browsers have restricted the use of third-party data gathered via their tools
• Organizational cloud maturity. Brands have invested extensively in cloud-based resources, relying on cloud solutions to house data, applications and tools used every day
• Cloud tools and technologies. The cloud solutions themselves have grown in sophistication and functionality, better able to serve the needs of marketers and other users
• Data integration and consumption needs outgrew traditional CDPs. The complex needs of data integration, usage and functionality have eclipsed the capabilities of many out-of-the box CDPs.

That last point is critical, noted Craig Schinn, co-founder of Actable, a consultancy that helps companies organize and optimize their first-party data.

“What we’re finding is that the rules around consent, privacy, data residency that have proliferated globally have prevented meaningful investment in [compliance]. Lots of companies focus first on their cloud data warehouses to comply with data residency consent. But if you think about replicating that across myriad connected technologies, you have a multiplicative effect on the amount of effort [needed] to achieve compliance as an organization.”

Those interrelated challenges of sophistication and compliance are why many brands are considering a CDP built on composable architecture.

Comparing packaged vs. composable CDPs

Packaged or composable — what’s the difference and how do you choose? Here’s a quick run down.

A legacy, packaged CDP requires marketers to store and then extract data from it, send it to a vendor, and map that data to the vendor’s standards.

• This approach is expensive and very time-consuming.
• The packaged CDP will have event collection functionality and the ability to build audiences, ID resolution rules and basic machine-learning and reporting.

By contrast, a composable CDP is a lighter approach. It pushes the work of compiling a 360-degree view of customers to the data warehouse.

• The approach collects events and data IDs in the data warehouse and uses the CDP to more quickly and efficiently build queries using data from all the sources natively kept in the data warehouse, not the CDP itself.
• The composable CDP takes a best-of-breed approach that takes the data warehouse information to generate all of the key marketing functions necessary for relevant, high-impact campaigns.

Lytics, for example, partners with Google Cloud to create an integrated solution that is a game-changer. Marketers, with no complex coding or IT requests, can develop queries, integrate profile IDs, add new attributes, and automates exports of events and profiles. The system allows marketers to confidently and securely share insights with partners across regions without jeopardizing privacy. With Lytics CDP, built-in API connections provide for tested, proven connections to the other tools marketers need for success.

This architecture eliminates the scratch build-and-buy approach that has hampered legacy CDPs. Cobbling together technologies and then investing in complex integrations comes with major headaches and requires significant resources, explained Schinn.

“Lytics composable CDP is a different type of ‘build and buy’ solution, one that requires little to no coding, no complex integration projects, and rapid time to value. With Lytics, you get a packaged component as well as a composable component… but ultimately the goal is to activate first-party data [in the most effective, efficient, flexible, and secure way possible. This means brands are leaving the data components in the data warehouse, and treating the CDP as an orchestration and decisioning engine on top of that data warehouse.”

Expert-recommended considerations for composable CDPs

Clients do have more to think about when deploying a composable CDP. With Lytics CDP, there are embedded tools that provide the means to assemble, activate and analyze data.

Here is a closer look at key data actions and how Lytics CDP helps.

• Data collection. In packaged CDPs, brands may have a good record of historical interactions with customers. But the data are incomplete. Some email addresses, but not all, for example, may be downloaded into a data warehouse. With a composable CDP, customers must consider all the use cases and data sources.
• Data assembly. Once the data are identified, the next consideration is how to assemble it. How will the data be organized? With Lytics, you have complete control of your data that allows you to build unified, context-rich profiles CDP is that the ease of connecting to those sources is considerable
• Data activation and analysis. A robust composable CDP provides you the tools to understand what your data is saying, using reporting and machine learning to glean insights that put the data to work. Lytics Decision Engine does just that. It’s a data activation tool built for marketers that unlocks hidden customer insights for transformational results

Lytics is transforming the way marketers collect, analyze and optimize their data. To learn more about Lytics CDP and the benefits of composable architecture, watch the full on-demand webinar.