Maria Novikova, CMO at MarTech/AdTech software development house Xenoss, describes how customer data platforms (CDPs) and data clean rooms (DCRs) are helping advertisers navigate the rapidly-evolving world of digital advertising.

________

Hi Maria, welcome to our Interview Series. Advertising is becoming less addressable, and costs are only rising. What role do data solutions built by Xenoss play in getting brands’ digital advertising under control?

In an increasingly fragmented marketplace, Xenoss helps brands overcome challenges in digital advertising in multiple ways – from building AdTech solutions and expanding platforms with new features, to consulting vendors as they scale their projects and helping cut infrastructure costs.

We are focused on providing brands and publishers with the tools that allow for a 360-degree view of customer data. Customer data platforms (CDPs) are one piece of that puzzle: they help teams manage their audiences better and activate first-party data.

Recently, there’s been a rise in data clean room solutions as well, and our team at Xenoss is eager to continue exploring the opportunities behind the concept of data collaboration. We find the ability of DCRs to bring advertisers together and fill the gaps in customer data really exciting and see the new technology as a timely solution to post-cookie data collection challenges.

How do customer data platforms differ from data clean rooms, and what additional value can DCRs provide?

There are three key distinctions between CDPs and DCRs.  The first important one is data accessibility. A CDP is designed for internal use, meaning marketers can only access their company’s data. Data clean rooms are built on the foundation of collaboration, so all participants are allowed to access each other’s datasets.

Another difference has to do with the types of data these platforms collect. Both technologies are designed to manage first-party data, but where a CDP collects user-level data, a DCR operates anonymized data.

So, while a CDP is a centralized hub for managing a brand’s first-party data, a data clean room is a way to expand data collection by enriching the dataset with third-party insight. So, connecting a CDP to a data clean room is a great way to expand first-party data capabilities and effectively organize and manage this data.

Marketing Technology News: MarTech Interview with Denise Vu Broady, CMO at Collibra

Clearly, the digital advertising industry needs solutions to its cookie/identifier issues, but it often feels like these new technologies are marketed as a silver bullet. Are there potential disadvantages to customer data platforms and data clean rooms that advertisers should consider before implementing?

I think the key here is that implementing either of these requires significant investments in technology and resources, and brands should be aware of the potential challenges before making any decisions, so they can be confident they’re setting them up in a way that ensures the benefits outweigh the costs.

When our clients come to us seeking custom software development solutions, they typically encounter various challenges. We see teams wrestling with cross-system incompatibility, silos between teams hindering collaboration, complexity, high costs of maintaining the infrastructure, as well as compliance challenges and security risks.

Since every AdTech vendor is facing unique challenges, we recommend carefully considering business objectives and needs before implementing CDP and DCR tools. After all, neither of those is a one-size-fits-all solution.

Retail media is a persistent theme in 2023, given retailers’ traffic and massive first-party data strengths. How is ad tech evolving to meet those challenges?

As you say, retail media has become a key growth area, with the likes of Publicis Groupe and Criteo making significant advancements in retail media-based identity solutions. Another notable development has been the emergence of retail DSPs, such as Skai and Pacvue, allowing retailers to control their advertising campaigns across multiple marketplaces and leverage their first-party data in more effective ways.

Meanwhile, in response to increasing programmatic penetration in retail, some retailers are turning to white-label DSPs to maintain a closed-loop network – as we’ve seen with Walmart with The Trade Desk – while others are opting for a more open approach, partnering with several players, such as Target’s Roundel or Kroger.

Retail media networks also require secure and privacy-compliant sharing of first-party data, so DCRs are starting to play a key role in enabling them to share their data with advertisers while retaining control over who can access it and how it is used.

Finally, AdTech companies are developing solutions to help retailers maximize the impact of their advertising on in-store sales, like we’re currently doing here at Xenoss. Our engineering teams are experienced in building a wide range of retail-focused solutions: ML-powered recommendation engines, solutions for cookieless targeting, ad performance measurement solutions, analytics dashboards and more.

You work across the Ad Tech/MarTech space – where else do you see innovation now?

We’re seeing significant innovation in the CTV space, with companies like The Trade Desk, Roku and Amazon ramping up their CTV advertising capabilities.

And, of course, with the ongoing shift away from third-party cookies and identifiers, there is a need for companies to focus on creating robust identity solutions that help reach target audiences while respecting users’ privacy.

Meanwhile, we’re seeing major advancements in contextual targeting (another approach for empowering brands to reach their customers without third-party cookies), with companies like GumGum and Zefr leading the charge.

Additionally, together with our clients, we acknowledge the rise of alternative ad formats, such as native advertising and shoppable ads. These are providing new opportunities for brands to engage with consumers in a more immersive and meaningful way.

Marketing Technology News: Loyalty Simplified: Smart Ways to Boost Grocery Loyalty With Technology