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The future of DMPs in a post-cookies world

DMPs are still important in marketers' jobs, but the move away from third-party cookies threatens the DMP's future. Here's what marketers and DMP providers need to know.

Data management platforms face an existential roadblock as third-party cookies begin to fade away. So, what does the future of DMPs hold without cookies?

DMPs enable organizations to gather large amounts of customer-centric data for online marketing and advertising. Historically, they depend on third-party data, so privacy concerns around cookies threaten the DMP's future. Marketers may wonder how DMPs can evolve and remain relevant as third-party cookies fade.

The evolution of DMPs

A DMP is one of the most powerful tools in the marketing stack, as it enables campaigns that divide consumers into clearly defined audiences to improve targeted messaging. Organizations that don't use customer data at this level are at a competitive disadvantage.

DMPs store customer information: demographic data, purchasing history, likes and dislikes. Data pipelines that collect information from webpage visits, registration forms and other online sources fill the DMP's repository, then marketers can analyze the data and send each customer the right messages.

As big data has matured, so has the DMP. Though it existed in various forms before the internet, the DMP hit its stride with cloud technology. Cloud environments enabled economical mass storage that greatly expanded the DMP's capacity and made it affordable to smaller organizations.

The role of cookies in DMPs

Despite DMP technology's benefits, it faces a major challenge. It depends on third-party data.

Organizations that don't use customer data at the DMP's level are at a competitive disadvantage.

Specifically, a DMP uses third-party cookies to track customers' viewing and browsing patterns. Most digital ads use tracking cookies, so any website that loads a third-party server's code can access that data. Third-party access means customers' data can wind up with companies they don't know.

Third-party cookies differ from cookies an organization can set. The latter are between the customer and the website they accessed; the former can be sold to the highest bidder. This system worked well for marketers over time until many customers began to delete third-party cookies due to privacy concerns.

Google plans to eliminate third-party cookies and address privacy concerns globally, while Apple and Mozilla have made changes to drop this support. This shift is both a trend and a compliance issue, as GDPR and CCPA regulations have introduced new consumer rights and business restrictions. Still, dropping cookies threatens the future of DMPs.

What does the future of DMPs hold?

However, the DMP can survive this seismic shift. DMP providers have a couple of strong pathways to take, like changing data sources and building new data pipelines.

A chart listing alternatives to third-party cookies
DMPs can use information from sources other than third-party cookies, including first-party data.

Use first-party data

Barriers to third-party cookies 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 providers can improve its use, fine-tune the customer journey and enhance CX to bolster the amount of data and insights gathered.

Marketers should pursue first-party data in any case. Its benefits include improvements in how the organization reaches, engages and converts customers. Direct contact and engagement online yields stronger data on customer likes, dislikes and behaviors, which makes it easier to improve CX.

Build new pipelines

If Google deprecates third-party cookies, the customer data pipeline changes. Data in the DMP would take different routes. DMP providers should diversify information sources and unify data into a more comprehensive customer view. For example, DMPs could tap 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 should be upfront and offer customers something in return for their data, rather than trying to obtain information discreetly. CX teams can personalize the online experience and ask what would make customers comfortable, then promptly provide it.

Building identification and consent into CX offers marketers one-to-one targeting. When the site directly identifies and engages with the customer, marketers can message more dynamically based on the customer's priorities during the engagement.

Build a walled garden

DMP providers can enable a walled garden approach -- which is publisher-driven audience targeting that treats customers like they all want to be there without subtle steering around. In a post-third-party cookie world, brands with large footprints based on direct customer engagement will have the strongest grasp of customer identity. DMPs with first-party data can make marketers stronger than ever.

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