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    CDP, DMP, CLV, and How to Keep Track of All these Acronyms

    Afton Brazzoni | Industry Analysis | 11th May 2021
    CDP, DMP, CLV, and How to Keep Track of All these Acronyms

    Modern marketers have access to a staggering 8,000+ martech solutions, so it’s no wonder there are myriad acronyms floating around on the industry landscape to describe various software systems and the metrics they track. In the case of media organizations, it’s important for marketing and ad sales teams to understand the acronyms that relate to both the subscription and advertising sides of the publishing business.

    In 2020, advertising sales made up 72% of media companies’ revenue, according to our Adweek report, Combining Revenue Models Gaining Traction in Media Industry. However, subscription models are quickly gaining ground, and are estimated to rise from 28% to 32% of publishers’ revenue in 2021. Keeping in mind that a powerful subscription funnel can fuel ad sales, it’s essential for marketing and advertising teams to work together to increase their impact. This includes sharing a common language.

    In this blog post, we’ll define the terms CDP, DMP, and CLV. We’ll also discuss the importance of understanding and discussing these acronyms across departments, and how your media company can stay up to date on industry terms.

    What is a CDP?

    A customer data platform (CDP) is software that collects data—primarily first-party data—from multiple sources such as your website and email marketing system to build customer profiles based on personal information. 

    CDPs enable media organizations to gain a deep level of insight into their audiences, and several publishers have had success with this tech. For example, the Boston Globe reported increases in both its ad revenue and premium content subscriptions thanks in part to its CDP. In addition, the Economist reduced its acquisition costs by 80% and tripled its digital subscriptions using the software.

    In a world where demand for personalization is growing rapidly, CDPs help media companies deliver customized marketing campaigns to targeted audiences at various stages in the funnel, and across multiple channels and devices. Thumbs up to that!

     

    What is a DMP?

    A data management platform (DMP) is software traditionally used by advertising teams to gather and analyze anonymous user data such as IP addresses and device IDs. The platforms collect this data from various sources, including websites and ad campaigns, then create a single picture of audience information. One major difference between DMPs and CDPs is that the former solution uses second- and third-party data rather than first.

    DMPs enable publishers to segment their data and launch targeted display ad campaigns to generate website traffic. However, the level of personalization this technology delivers is not as customized or as omnichannel as what a CDP offers.

    Still, DMPs do provide a centralized data repository that allows you to optimize your marketing efforts. This can also have a positive impact on the subscription side of your business, because the data in your DMP can help you fine-tune your subscription offerings based on your market’s behaviors and preferences.

     

    What is CLV?

    Ensuring that teams across your media company are familiar with various tech-related acronyms is helpful when it comes to the success of your combined advertising-subscription revenue model. You can take this internal education one step further by fostering an understanding of the metrics that technology and data can enable you to track, and the insights you can uncover as a result.

    Take customer lifetime value (CLV), for example. Calculating CLV can help your media organization pinpoint your most valuable customers—whether subscribers or advertisers—and nurture them accordingly to expand and retain their business. This calculation involves estimating a customer’s total spend on your products or services over the course of their entire relationship with your publishing company, like this:

    CLV = [Average Transaction Value] x [Number of Transactions] x [Average Length of Customer Relationship]

    According to the Pareto Principle, 80% of a business’ profits come from only 20% of its customers. These numbers demonstrate why it’s critical to know who your biggest fans—and spenders—are, so you can prevent costly customer churn.

     

    Why multiple teams should understand industry acronyms

    The media industry is an ever-evolving field, and many organizations are currently in the midst of significant change management initiatives such as implementing combined revenue models. However, only one third of all change projects succeed. This is why publishers must dedicate time, resources, and effort to breaking down departmental silos that prevent activities like sharing data (in a responsible way, of course).

    “Every department should have access to dashboards that report quality, real-time data on subscription and ad performance,” Christian Printzell Halvorsen, CEO at Cxense, told Digiday. “Department heads should review that data at cross-functional meetings so all team members know what content and reader behavior is driving subscriptions, which ad campaigns need fulfillment, and what upcoming content can help the team meet its goal.”

    This type of knowledge sharing is only useful if all of your team members have a solid understanding of customer data terminology, and how it relates to their area of your publishing company. In an industry with an overwhelming number of acronyms to learn, it’s important to seek out resources to keep up to date. 

    How to learn industry terms

    Whether you’re new to the world of media and digital advertising, or you’re simply trying to stay current amidst rapid digital transformation within your publishing company, there are a few resources you can turn to for information on both industry terminology and trends. 

     

    Top Lineup Systems Blog Posts from 2020

    Sources to Keep Up With All Year

     

    Keep up to date on the subscription business

    At Lineup Systems, we’re committed to helping publishers and their teams expand their industry knowledge. That’s why we’ve created a quick guide called 16 Subscription Terms Every Advertising Professional Should Know, where we define each term and offer tips for how to keep this information top of mind in your daily work.

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