Interactive Advertising Bureau
23 November 2021

Member Guest Post with Audiencerate - How CPDs are the Key to Digital Transformation Success for Europe’s SMEs


In this week’s member-guest blog post, we hear from Filippo Gramigna, CEO at Audiencerate. Filippo is diving into the post-pandemic world of SMEs, looking at their overwhelming importance, the challenges they may face, and the role that Customer Data Platforms could play in ensuring their long-term success. 


COVID-19 transformed the marketing landscape. While eCommerce was already steadily moving into the mainstream, real-life restrictions and lockdowns accelerated the transition to online retail. Companies small and large shifted to a digital-first approach to respond to changing consumer demands, as an additional  6% of EU internet users focused their purchasing power online. Nevertheless, a closer look at Europe and the UK reveals SMEs still bore the commercial brunt of the COVID-19: 70% reported reduced revenue and a further 50% could not guarantee they would survive the next 12 months. Coinciding with Google’s phasing out of third-party cookies, SMEs are facing evermore challenges when it comes to competition — especially against larger brands and companies — and questions surrounding privacy and targeted advertising.

The challenge for SMEs

Let’s take a step back to consider why SMEs are so important. According to a recent IAB Europe report, 99% of European businesses are SMEs, bringing in 50% of European GDP and employing over 100 million people, it is therefore understandable that The European Commission considers them “the backbone of Europe’s economy”[1]. The twin challenges to the industry — COVID-19 and Google’s third-party cookie disavowal — injected a high level of pressure to innovate, finding new ways to connect to audiences that respected privacy concerns. First-party data, with its granular insights drawn from loyal customer input, has emerged as a clear favourite substitute as publishers, agencies, brands, and tech platforms scramble for solutions. However, an initial swarm towards new technologies such as videoconferencing, the Internet of Things, and Augmented Reality tailed off following continued economic uncertainty. As first-party data rewards companies which already benefit from both a large consumer base as well as the technology to manage their data — consider Google and Facebook advertising ecosystems — this leaves SMEs in dire need of additional technological solutions.

While the pandemic prophesied an ad spend slump unseen since 1929, reality witnessed a spending surge of 6.3%. UK-centric data echoes this sentiment: half of SMEs considered digital advertising to be an important aspect of business during the crisis, and an even larger proportion (63%) thought digital activity was a good return on investment. Without the limitless budget of larger corporations, SMEs rely, in large part, on targeted advertising to reach their audiences as well as reduce costs. And if these businesses are to continue providing cultural and financial value to the EU and UK as well as contribute towards building a sustainable, digital future, then a blanket ban on targeted ads—as suggested by several MEPs — is not the way forward. So, what is?

Steps to success

Taking into account the myriad considerations of the current landscape, Customer Data Platforms (CDPs) arise as the privacy-first solution to building the personalised experiences consumers have come to expect. Aggregating customer data from individual, disconnected silos, CDPs provide the necessary information that generates 360° customer profiles, facilitating consistent communication across channels and fostering loyalty-building strategies. Furthermore, the industry-approved identifier systems can track and measure ROAS, assisting companies in the continued optimisation of their campaigns.

The strength of CDPs lies in their capacity to unify the swathes of customer records from across multiple platforms and databases, both on- and offline. Enriching data with compliant sources to gain scale, CDPs are then able to segment customers based on behaviour and acquisition. Integrated platforms, on the other hand, allow a business to activate omnichannel campaigns. Another way they can contribute to business growth is by leveraging data independence to accumulate knowledge — having comprehensive access to their own data to help influence business decisions — and continuously expanding the database and refining the algorithms. A CDP can provide a vast range of options to an SME, and the success all depends on how they plan to use their CDPs; options include execution layers and personalisation capabilities, or identity resolution, and customer segmentation.

While the marketing sphere is still in the grips of constant transformation, there are a few certainties for SMEs to keep in mind while adapting to the present and preparing for the future. Firstly: data makes the world go around. Data defines our strategies, structures, and goals. Compared to 2016, estimates envisage a tenfold increase of data by 2025, resulting in 175 zettabytes. Secondly: the pandemic was only the beginning. Multinational corporations such as Amazon, Netflix, and Facebook have long since recognised the importance of and benefited from the consumer data and attribute their success in part to translating these insights into personalised products and services. SMEs that are slow in this respect will not only fall behind in terms of competition, but they may not survive at all.

Digital transformation was key to SME survival during the pandemic, many of which, despite suffering some losses, were still able to develop and push forward technological solutions. However, just because circumstances are returning to “normal” does not mean that businesses should abandon their initial digital dash. Tightening GDPR regulations, omnichannel campaign demands, fluctuating consumer habits and an ever-growing reliance on data demonstrate a very real need to continue investing in tech. CDPs are one answer to the complex problem of customer experience, providing SMEs with the ability to keep up with stiff competition as well as the complex needs of our time.




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