Marketing Data Management: Understanding Its Importance, Benefits, & Challenges
Today's businesses are generating and collecting massive amounts of data. But managing this data can be challenging. Growing volumes of data can negatively affect data quality and manageability. A recent study shows that marketers waste 21 cents of every media dollar because of poor-quality data. The more data you store, the harder it becomes to see what data you have and extract value to drive successful marketing campaigns.
Before you can translate raw data into valuable insights, you need to summarize, categorize, and analyze it. In this post, we’ll discuss the concept of data management and its challenges, benefits, and best practices.
What is data management?
Data management is gathering, organizing, storing, and protecting an organization's data to make it easier to analyze and extract meaningful insights. As organizations collect data through customer interactions with products, websites, social media, marketing campaigns, and customer relationship management (CRM) systems, data management helps them make sense of it.
Goals of data management
Data management gives organizations centralized control of their data. Data often lives in various sources and platforms across many departments. These siloes make it difficult to gain complete visibility of all an organization’s data.Data management unifies organizational data for better data integrity, accuracy, availability, accessibility, and security. Combining data from several sources creates a single source of truth that allows your company to make more complete customer profiles and add value to the products and services you provide.
The difference between customer data and marketing data
Customer data refers to zero-party and first party data about a customer. Zero-party data is data a customer intentionally shares with a business such as personal preferences like size and style. First-party data is data collected as customers interact with your business through various channels such as physical stores, websites, and social media. Customer data includes personal (PII—or personally identifiable information, such as name, address, email, phone, etc.—and non-PII), demographic, and behavioral data and is used by companies to improve the customer experience and fine-tune business processes over the long term.Marketing data is information that can be used to improve your marketing strategies including customer information, market research, competitor intelligence and marketing metrics. It helps you understand who customers are and evaluate the effectiveness of your current marketing strategies to create more effective campaigns and optimize your processes. Marketing data includes customer data as well as third-party data such as survey responses, income, age, and websites visited collected through public and private external sources.
CDP vs DMP
Customer Data Platform
A customer data platform (CDP) is a marketing technology that aggregates and integrates data from multiple sources into a single, unified source that gives you a complete view of every customer. It operates in the background to unify and manage customer data, and facilitate data activation.
Data Management Platform
A data management platform (DMP) is software specific to advertising. It does not store first party data, but collects and manages data to build anonymous customer profiles around 2nd party (data purchased from other companies) and 3rd party data. They help businesses generate more accurate audience insights to target specific users and contexts. A CDP helps DMPs utilize all company data (0p/1p) to create more accurate ad targeting. The key difference between the two platforms is the types of data they use. CDPs focus on first and zero party data while DMPS mainly work with third party data.
Marketing data management challenges
The pace of today’s businesses and the high volumes of data they generate make data management an ever-increasing challenge. Let’s look at some of the top challenges organizations face with data management.
Complying with changing data requirements
Data protection and privacy regulations are complex and ever-changing. Failure to follow data requirements when collecting and storing customer data could result in high penalties or legal consequences.
Difficulty accessing and activating data
In many organizations, data is also siloed, with several teams working from different data sources. This makes it harder to know what data you have, where it’s stored, and how you can use it. It also increases the time it takes for users to get the information they need and makes it more difficult to benefit from real time insights into your target audience.Implementing data management best practices will help you avoid these pitfalls.
How does a customer data platform help?
Because it can aggregate data from almost any source, a CDP simplifies the task of collecting and unifying marketing data. Marketing teams don’t have to search through multiple sources to find the data they need. With data accessible in one place, marketing teams can develop and execute more successful marketing plans to deliver greater value to customers. CDPs work with DMPs to maximize the use and collection of PII. Since DMPs cannot store PII, CDPs can push audience data with customer PII to DMPs to pass to demand-side partners (advertisers). On the DMP side, when a customer clicks on an advertisement downstream, the CDP will capture and utilize the PII data for additional analysis and segmentation. When used together, CDPs and DMPs can result in increased cost efficiency and more accurate ad targeting.
Marketing data management best practices
Implementing data management best practices can reduce the risk of dirty data and ensure that your data remains at its highest quality. Consider the following data management best practices.
1. Integrate Your Data
As mentioned, one of the major challenges of marketing data management is siloed data. Customers interact with your business across several touch points. Data can be used more effectively if it is aggregated from across all sources so that it can be analyzed together. This allows you to see the complete customer journey to better identify patterns and contexts
2. Prioritize data security
When collecting customer data, it’s important to adhere to the laws and regulations related to data security and customer privacy. Make sure everyone involved understands these requirements to ensure your data management system remains compliant.
3. Focus on quality data
Be conscious of the data you are collecting. Good data in means good data out. Outdated or inaccurate data can affect the accuracy of your marketing analytics and decision-making. Check data for inconsistencies, incorrect formatting, spelling errors, and duplicate data, and train employees to input data correctly to ensure your data's continued integrity and quality.
4. Analyze and apply your data
To make the most of your data, you need to analyze it. Integrating and organizing your data makes it easier to analyze and activate. You can leverage the insights gained from analysis to adjust and optimize marketing strategies or create new ones based on data patterns and trends.
5. Effectively communicate data across teams
Effective marketing requires significant collaboration between teams across the organization. Marketing teams need to communicate findings with product development and sales departments as well as management. Summarizing data into actionable reports for each team makes cross-company collaboration easier and helps them to see how your marketing campaigns are impacting their individual goals.
Moving forward with marketing data management
Here you’ve learned the ins and outs of data management, including benefits, challenges, and best practices for extracting the greatest value from your data. What’s next? Consider a CDP to manage your marketing data. A customer data platform is the first step in transforming your data into profitable customer experiences. It can also help you overcome the complexities of collecting and unifying your customer data, making it more accessible to marketing teams so that they can deliver the right messaging and products to the right customers. When used with a DMP, a CDP can help you capture and use data such as PII, that a DMP cannot use on its own, to give you the most accurate data for advertising and targeting.If you need a more comprehensive view of your customers and their life cycle, connect with one of our CDP experts.