January 5, 2016

The CIO and CMO -- In Pursuit of Data Symmetry

It is now accepted that the CMO and CIO positions are inter-dependent in the business of managing customer data in pursuit of demand and growth. The simple notion is that as more data signals can be applied to segmentation and media targeting it follows that the CIO needs to create a platform informed by, and deployed by, the CMO for the application of that data in the real world. We used to call it "the single view of the customer." Today we are as interested in the consumer we would like to know as much as the customer we do.

The fundamental issue, albeit rarely described as such, is the creation of internal data symmetry; the central purpose of which is to enable multiple stakeholders such as marketing, sales, media, research, PR and others to work collaboratively and across functions while achieving multiple business and marketing metrics (sales, distribution, brand health, attitudes, usage, etc.).  It also forces key questions; is brand health a metric to be maximized or a minimum constraint while achieving sales KPIs?

Internal symmetry allows for external asymmetry that in turn creates competitive advantage by knowing something about a customer or even an ad impression that is not known by competitors or others in the marketing supply chain, typically those that sell on shelf and on air access to the customer. The value this presents is obvious, if you get 100 calls from Spot A and 500 from Spot B, who is the last person you tell?

Executing against the opportunity is less obvious and requires prioritizing. An easy way to think about this is to put data into two buckets:

Data you own -- typically about the customer you know

Data you rent, buy or accrue as the consequence of other actions -- typically about the consumer you would like to know

The first bucket; CRM and loyalty, direct transaction data (ex-factory or point of sale), site side analytics, e-mail and other databases are CIO territory.

For his partner, the CMO, the focus is on third party data and community and campaign level information that can become appended to and conjoined, multiplying the value of bucket one, and, critically the application of all the data to segmentation and media trading - the sources of growth.

Campaigns (and to an extent communities) by their nature are episodic and their data exhaust is often of more ephemeral value especially as few constants are available and the data tend to be less clean than the CRM or transaction file. Campaign and cookie data degrades over time, more so over multiple matches. Third party data is, for a price available to anyone. Neither require the level of corporate or personal security as bucket one. Publisher data, including the first party giants like Google and Facebook, is of potentially high value but more to seller than buyer if advertisers are denied third party ad delivery and tracking.

In light of this brief, and admittedly incomplete analysis, it's interesting to consider which parts of the marketing tech / ad tech cloud (many just a minefield of acquired tools re-engineered and re-branded to create a complete stack with no guarantee of best for purpose in all components) that the enterprise should control. Some companies, particularly those with high value and abundant first party data that are in direct control of end user distribution want to own everything. That's not a bad idea as long as you allocate resources to deal with the inevitable breakage in components. Unlike diamonds, software is rarely forever.

For others it's all about the owned data (see bucket one above) and the enterprise DMP (data management platform) that secures, harmonizes and organizes that data and creates a safe environment for it to co-mingle with the contents of bucket two. Aligning the enterprise by all of division, brand and geography on the DMP is THE key to internal data symmetry. Having brands disconnected from categories and disconnected again from countries significantly reduces the potential of operating across the portfolio.

Of course, the application of data is most refined, and most developed of all closest to the point of a binary event like a sale. This only scratches the surface of data driven marketing. When so much of an advertising accelerated economy depends on performance at the broadest as well as the narrowest points of the purchase funnel, data is a key ingredient of success. At those points the broader attribution techniques developed by the agency community and specialists can actually be used to identify and price the most valuable third party data sets and apply using programmatic and other methodologies.

Perhaps then it's better to talk not of convergent roles but about the complementary relationship between the CIO and CMO and the agencies that take the data to market. Inevitably we believe that media agencies have an important place in the supply chain, or perhaps, more accurately, the demand chain.

This is not a question of contracts which has been a theme of 2015 nor is it a matter of system compatibility- praise the API. How those contracts are operated and connections executed to create a fluid stack around the DMP is most important and is a function of multiple factors:

Who has the greatest exposure to multiple stack components in both similar and different categories?

Who can compare performance across category and geography?

Who can on board new or replacement modules most nimbly?

Who can take a horizontal view of the integration of the client DMP with digital asset management systems, a plethora of search, social and display bidders (often with their own DMPs), ad serving and campaign management platforms, social listening tools and the rest?

Who has the most real world experience of applying systems and data to live markets?

Agencies that have a genuine engineering group are good at this; agencies that combine that with their own original data sets sourced from their own technologies and original data collection are best of all. What's more it is agencies that see every media channel, all the campaign level data and, agencies that are attribution and allocation agnostic that are best placed to serve marketers. For the most part, tech that is operated by media sellers is less likely to share this quality.

The challenge for the CIO is to collect near perfect data and simultaneously keep it safe while unlocking it for CMO and agency application in the market often via third parties. In so doing the enterprise combines internal symmetry with external asymmetry and does so with partners that are exposed to all the tools, all the data, all the inventory, all the time. In there lies the knowledge from which advantage accrues.



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