Marketers know that in the constantly changing world of consumer expectations, having the right tech stack is key. As first-party data becomes synonymous with marketing success, many are turning to tech designed to capture, organize, understand and activate customer insights to enable audience development, customized experiences and better performance.
You may have heard of (or might even currently use) a data clean room or customer data platform (CDP) solution already. Both are integral tools when executing your first-party data strategy, but understanding which tool to use comes down to understanding their main functions. Do you know the differences between them?
Data clean rooms and CDPs are sometimes coupled together because they're both martech products that provide customer insights, but there are some significant differences between them. At their most basic, both tools take data and organize it for brands to use. Different vendors will offer different levels of support for marketers. For example, many data clean rooms and CDPs don't come pre-equipped with identity and data, which affects the efficacy and scope of both techs' capabilities.
Fundamentally, though, the two perform different jobs.
A customer data platform (CDP) is a martech solution for known customer data. CDPs are rooted in PII-based data, and designed to improve marketing outcomes for known customers.
A brand's known first-party data includes basic customer information (such as name, email, address, etc.). It also includes behavioral and transaction data (such as what a customer buys, their browsing behavior on owned sites and communication preferences). If a brand uses identity resolution in their tech solutions, these data points can be unified, cleansed, completed and expanded, providing a more complete view of a customer outside of what the brand knows about them.
CDPs offer a variety of benefits for known customer data. CDPs that go beyond mere unification by using identity resolution deliver the best view of the customer.
Unifying customer data inherently makes it more usable. Still, a lot of customer data is incomplete, duplicative and inaccurate. CDPs equipped with identity resolution unify, cleanse and enhance customer data for maximum use. Campaigns built on that accurate, dynamic data drive intelligent marketing and advertising. Because a brand knows their customers, they can understand their habits today and tomorrow.
A better customer experience starts with a cohesive, intelligent and non-fragmented omnichannel approach. Brands can reach their customers with relevant messages and creative on all devices, even connecting paid and owned campaigns.
CDPs with identity not only help with prospecting new customers but also empower more effective cross-sell opportunities, the ability to thoughtfully re-engage dormant customers and nurture strong brand relationships. This is true whether they engage with your brand through a website, mobile app, social media or in-store.
To find prospective customers, brands need to rely on ID-based data, or unknown data. Data clean rooms give brands access to that type of data. They provide a safe, pseudonymized data science environment for audience insights and analytics. This allows brands to drive prospect engagement based on consumer behaviors in the wild and use first-party and third-party data to build audiences, activate media and provide measurement.
Data clean rooms are great tools to increase the quality and scope of known customer data by expanding into unknown customer data. Brands can access a broader scope of who their prospective customers are, which is especially critical for brands without a lot of first-party data.
A clean room that is equipped with identity and data enables brands to understand their current customers more deeply, build lookalike audiences based on their best customers and transform those unauthenticated customers into known ones.
With a complete, dynamic and persistent understanding of user behavior, preferences and demographics, you can personalize marketing campaigns across owned and paid channels, improving ad engagement and overall campaign performance.
Put simply: CDPs collect and analyze known customer data. Clean rooms are a safe, pseudonymized space for known and prospective customers.
Customer data platform (CDP)
Clean room
Ultimately, both are trying to solve for the same thing: creating seamless customer experiences rooted in first-party data. CDPs do this for customers with name-based recognition, driving lifetime value because a brand knows its current customers more deeply. Clean rooms do it in an ID-based environment, giving brands access and insights to known and prospective customers in a data-science environment.
Both support secure data collection. Both also allow for deeper insights into consumer behavior as it relates to a brand’s marketing strategy.
The synergies between a clean room and a CDP boil down to three things:
All three of these things enable stronger personalization and more efficient and effective media spend. Brands that opt to use both often do so because their CDP enhances known customer data and plugs it into a clean room for machine learning analysis. A solid data foundation inside a data clean room bolsters audience modeling and activation, and coupled with AI, allows personalization for known and prospective customers at scale.
Brands know who they're speaking to and where to speak to them, enabling smarter media spend.
Regardless of which tech a brand chooses, there are some key considerations they should consider before selecting a technology vendor.
A lot of CDPs and data clean rooms do not come pre-loaded with data and identity. They're just empty boxes to fill with your first, second or third-party data, and many marketers find they have to purchase an identity resolution layer separately to sit on top of either technology.
That said, you can buy CDPs and clean rooms with identity resolution built into the platform, which makes streamlines operations (not to mention procurements) and is critical to support a variety of use cases:
While both solutions can maximize customer data, the questions marketers need to ask themselves are, “How much data do I have?” and "who am I trying to reach?"
To get the most value out of a CDP, brands need access to first-party data. This could be existing data a brand already has or data a brand could potentially capture. For brands that don't have a lot of data—or for brands focused on data collaboration—a clean room is a better option.
A brand also needs to consider who they're trying to talk to. CDPs are designed for known customers, and when equipped with identity and data, drive deeper, more meaningful connections. Clean rooms can reach current customers, but because they're more effective for brands looking to expand their data, they're great for finding prospective in-market customers.
Based on the scope of data a brand is working with, their use cases might change. Marketers need to understand their unique challenges and their desired outcomes, especially if they have a limited budget.
Epsilon Customer, a CDP solution, and Epsilon Clean Room are more than empty boxes. They come pre-loaded with identity and proprietary data, giving marketers access to a universe of in-market buyers. Our solutions are also designed to work together, giving marketers confidence in their data quality.
With Epsilon, you’ll be able to build, enrich and extend your first-party data through our CDP solution, and target custom audiences with other first-party and third-party data insights using clean room.
Learn more about Epsilon Customer and Epsilon Clean Room.
