With the media landscape expanding rapidly and advertising competition reaching new heights, the media and entertainment industries face mounting pressure to understand their audiences. In fact, a recent study shows that 78% of media companies struggle to gain deep insights into customer behaviour and preferences. In a recent survey, it was found that 62% of media companies experienced a decline in the effectiveness of third-party data for predicting consumer behaviour, mainly due to the increased scrutiny of data privacy regulations like GDPR and CCPA. As web browsers continue to restrict third-party cookies, the importance of collecting and leveraging first-party data becomes even more crucial.
Recent research indicates a significant rise in the adoption of Customer Data Platforms (CDPs) by media and entertainment organizations, with 85% of industry leaders recognizing the value of implementing a best-of-breed CDP. These platforms empower companies to gain valuable insights into their customers, leading to a 32% increase in subscription growth and delivering greater value and effectiveness in advertising campaigns.
Reasons for Adoption:
Uplifting personalization and promotion: In today's competitive digital marketplace, it is crucial to deliver personalized content recommendations and tailored advertising to each user. To achieve this, leveraging a Customer Data Platform (CDP) becomes invaluable. By consolidating data from various sources like website interactions, social media, multiple channels, and email statistics, a CDP provides a comprehensive view of audience segments at both a collective and individual level. This holistic perspective allows businesses to offer real-time and personalized recommendations based on users' interests, preferences, and behaviour. Studies show that companies implementing personalization strategies through CDPs experience a 19% increase in click-through rates and a 15% boost in conversion rates.
Retaining subscribers and content affinity: This use case holds significant value in the realm of content monetization, especially as publishers explore novel content formats and packages accompanied by varying price points. By analyzing shifts in engagement levels and patterns among users, companies can identify customers in the early stages and take targeted actions such as providing personalized discounts or promotions tailored to their preferences and behaviors. Leveraging AI models within the CDP enhances performance in customer experience systems and enables publishers to optimize content monetization strategies. According to industry data, organizations that leverage CDPs for personalized content recommendations experience a 23% increase in customer engagement and a 17% decrease in churn rates.
Price sensitivity: Gaining a deep understanding of customer behaviors and preferences helps identify early signs of potential churn risks. This knowledge empowers proactive and targeted actions, boosting customer engagement. By leveraging CDP insights and conducting A/B tests focused on engagement and adoption, companies can analyze customers' responses to price changes. This allows for the identification of potential churn risks and the implementation of preemptive measures, resulting in minimized customer attrition and maximized long-term engagement. Research shows that companies addressing potential churn risks early on can increase customer retention rates by 25%.
Also Read: Why Retail Industry Adopting CDP?
Individualizing content recommendations: Personalized content recommendations play a vital role for media companies, serving as a crucial use case. By employing a content affinity engine and a data tracking system, CDPs enable the analysis of user interactions with content and deliver relevant recommendations in real-time. This tailored approach enhances user engagement and satisfaction. Media companies that utilize CDPs for individualized content recommendations have reported a 21% increase in page views and a 14% increase in user retention rates.
How CDP and DXP are different from each other? Digital experience platforms and customer data platforms are both software solutions that help organizations collect, manage, and analyze customer data. However, there are some critical differences between the two:
A digital experience platform is primarily focused on delivering a personalized digital experience to customers. It provides tools and capabilities for creating and managing digital content, optimizing customer journeys, and delivering tailored experiences across various channels and touchpoints. The emphasis is on creating engaging and interactive experiences for customers.
On the other hand, a customer data platform is primarily focused on collecting and managing customer data. It serves as a centralized repository for customer data from various sources, such as CRM systems, marketing automation tools, transactional databases, and more. The customer data platform enables organizations to unify and organize customer data, create a single customer view, and leverage that data for analytics, segmentation, and targeted marketing activities.
In terms of architecture, a digital experience platform is often built on a microservices architecture, enabling rapid application development and deployment. On the other hand, a customer data platform is typically built on a traditional three-tier architecture, designed for batch processing of data, managing and processing large volumes of customer data efficiently.
The adoption of CDPs in the media and entertainment industry is driven by the need for better customer understanding, targeted marketing efforts, operational efficiency, data privacy compliance, and technological advancements. By harnessing the power of CDPs, media and entertainment companies can not only create compelling content and personalized experiences but also achieve higher customer retention rates, improved engagement, and increased operational efficiency. Embracing this transformative technology has become a necessity for long-term success in an industry were understanding customers and staying competitive are paramount.