TMW #187 | The contracting data supply chain

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The contracting data supply chain

The first-party data supply chain for marketing is contracting, and it’s squeezing the CDPs in the middle

Remember Bee Movie?

When Jerry Seinfeld’s character Barry first meets Vanessa Bloome, voiced by Renée Zellweger, he explains the intricate process involved in making a single teaspoon of honey.

“It's not just flowers. It's the whole thing. You know, bees, flowers, pollen, honey… it’s all one big machine”. 

And much like honey is the final product of a multi-stage supply chain, so is customer-facing marketing. When it comes to using first-party data for marketing, it must pass through a bunch of different systems to eventuate as a single teaspoon of marketing gold: An email, SMS, push notification, banner ad, or website experience. 

For the sake of simplicity, I think of these systems as three links in a supply chain. You can extend this further to include data collection, standalone identity platforms, reporting, and other peripheral systems, but let’s focus purely on the three key types of platforms for activating first-party data.

The first link is the cloud data platform, which is increasingly becoming the center of gravity for the Martech stack. Most companies nowadays use some form of data warehouse, data lakehouse, or data lake to centrally store and organize the data they hold across the business.

The second link is the orchestration platforms that allow marketers to move data into their activation platforms. Since CDPs first appeared on the Gartner Hype Cycle in 2016, they’ve been the preeminent platform to support data orchestration, deposing DMPs in the process. In the last year we’ve seen Data Collaboration Platforms (DCP) become a viable option here too, particularly for privacy-compliant orchestration of data for advertising, as TMW CEO Juan Mendoza explains in TMW #167 Data collaboration and the liberation of identity:

“This brings me to a new category emerging out of the changing infrastructure: Data Collaboration Platforms (DCPs). Adtech and Martech are more aligned than ever, bonded by regulatory change, the historic destruction of third-party trackers, and new incentives. The DCP is more than just rearranging a bunch of letters and calling it a new category; it’s a response to the changing needs of marketers.”

Data Clean Rooms (DCRs) sit somewhere in the middle between orchestration and activation, depending on which clean room it is and what use case it supports.

The third link is the activation platforms that deliver an experience directly to customers and prospects. This can be direct marketing via email, SMS, and push notifications. It can also manifest as website personalization. As signal loss – marketers’ ability to identify consumers online – deteriorates, this increasingly includes activating first-party data for advertising with the major Walled Gardens – Google, Meta, Amazon, TikTok – and the growing list of retail media networks.

In recent years, the first and third links in this chain have caused the data supply chain to contract, leading to a situation where there are fewer layers of technology and integrations between a row of data in the data warehouse and a customer-facing piece of marketing.

The cloud data and activation platforms have done this firstly by developing direct warehouse-native integrations that skip over the orchestration platforms, and secondly by rolling out typical CDP features. The result: These concurrent trends are putting pressure on the CDPs that have dominated the middle link of the first-party data supply chain for the best part of a decade. 

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Stay Curious,

Keanu Taylor

Make sense of marketing technology.

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