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June 21, 2019

How Customer Data Platforms Can Increase Advertising ROI

By Venu Gooty, HGS Digital

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For advertising to work, it needs to be accurately targeted. Good ads speak to customers about their personal needs and interests, which is why they generate sales. But accurate targeting is notoriously difficult and it’s common to waste half a marketing budget on directing ads to people who simply aren’t suited to the product or service on offer. Many marketers are now trying to overcome the challenge of targeting by using Data Marketing Platforms (DMPs) to create lookalike audiences with limited understanding of their current customers. While DMPs are effective at providing aggregate-level data, they often fall short when it comes to improving targeting – and they don’t necessarily help marketers understand their customers across a lifecycle, encompassing their first visit, research, purchase and post-purchase.

Programmatic advertising is another emerging industry which marketers have been experimenting with varying degrees of success. Programmatic advertising helps buy ads in real-time and target to specific individuals. While programmatic advertising can seem efficient, it’s actually more expensive. If you simply rely on DMP data on whom to target, you still are making advertising decisions on how a 3rd-party company (DMP) categorizes and defines the user persona. This lack of transparency can make it difficult for brands to understand exactly where their budgets are going and whom they’re targeting.

Programmatic advertising and DMPs are both valuable tools for marketers. But a system that brings together all relevant data for targeting a known profile can lead to best possible results.

Solution to the Challenge of How to Achieve Accurate Targeting

There is a great opportunity for marketers to use big data to develop a better understanding of customers and improve targeting. The trouble is, most marketers lack the knowledge to do this effectivel