DMPs Are Useless: Why Modern Retailers Abandon Ship and Embrace New Advertising Strategies
The retail industry is in the midst of a seismic shift: an era defined by heightened customer privacy concerns, increasing privacy regulations, and the impending demise of third-party cookies.
With major platforms like Apple (iOS and Safari) and Firefox leading the charge to abandon cookies, third-party identifiers have dropped 50 percent to 60 percent in signal fidelity. That’s left tools like data management platforms (DMPs), once a trusty staple in many marketers' tool belts, a thing of the past.
In fact, industry-leading DMP vendors such as Adobe, Salesforce, and Oracle already stated they’re turning off the lights to their DMPs. This changing landscape calls for retailers to rethink their data management and advertising strategies with customer privacy firmly at the center of these best practices.
Invest in First-Party Data Strategy
In the void left by third-party data, first-party data emerges as a lifeline for retailers. First-party data, that is, personally identifiable information (PII) and durable identifiers collected with consent from customers from loyalty programs, login information, etc., will allow retailers to understand customer behaviors and interest to target ads, content and products to audiences.
Enter a Data Clean Room
Data clean rooms (DCRs) offer a controlled environment for matching retailers' first-party data with anonymous data from other retailers or brands, ensuring privacy isn’t compromised. With this robust data, retailers can glean actionable insights into customer behavior and preferences and create tailored marketing campaigns that are both effective and compliant with today’s privacy standards.
Consider Cookie-Less Targeting Strategies
As cookies become obsolete, retailers must adopt alternative targeting strategies that don’t rely on personal identifiers. These include:
- Contextual Targeting: Instead of relying on personal data, retailers can align their ad content with the content on the page, ensuring they’re delivering relevant ads.
- Identity-Free Audience Targeting: By using aggregated and anonymous data, retailers can segment audiences based on shared characteristics or interests. This facilitates targeted advertising without compromising individual privacy.
- Walled Gardens: Platforms like Facebook, Meta, or TikTok operate within closed ecosystems and have access to lots of first-party data. Retailers can borrow customer data from walled gardens for precise targeting and optimized campaigns.
What’s Next?
With Google leading the charge to phase out cookies, beginning with 1 percent of Chrome users no longer having cookies by the beginning of 2024, it’s time for retailers to embrace alternative solutions. Retailers transitioning from dated DMPs to strategies that deliver targeted and privacy-compliant experiences is no longer just an option but a necessity in today’s cookie-less world.
Peter Ibarra is the head of AdTech solutions for Amperity, a customer data platform company that uses AI to deliver a comprehensive and actionable customer 360.
Peter Ibarra is the Head of AdTech Solutions for Amperity, a customer data platform company that uses AI to deliver a comprehensive and actionable Customer 360. In this role, Peter leads Amperity's product strategy across digital media, Retail Media Networks, second-party data collaboration, adtech partnerships, and post-cookie first-party activation.
Prior to joining Amperity, Peter served as the Director of Strategic Initiatives at Dstillery, where he oversaw the development of strategic partnerships and managed new data and marketplace integrations for Dstillery's audience products. Additionally, he led the organization's internal Alignment & Innovation committee and oversaw the development, implementation, and promotion of Dstillery's Mission Statement and Principles + Values.
