There’s no shortage of TLAs in the ad tech world and it seems a new one is coined every day. One of the latest trends in digital marketing is the CDP – Customer Data Platform. Promising a competitive edge in the ability to engage, surprise and delight the customer and increase operational effectiveness Customer data platforms are becoming a popular component in the marketing tech stack of major retailers and brands. Do they live up to the hype? And should you be using one?
What is a CDP (Customer Data Platform)?
(source: Element Solutions)
According to the vendor-neutral CDP Institute, a Customer Data Platform is defined as “packaged software that creates a persistent, unified customer database that is accessible to other systems”. To understand the meaning of this somewhat vague definition, the CDP expands on three key elements in this definition.
Packaged software means that CDP is provided as a service rather than a technology. Aimed at marketers and marketing departments rather than the IT teams, it is faster to integrate and easier to use than a typical data warehouse project.
Persistent and unified customer database are actually two elements. The unification of data in the CDP means that it centralizes and tags unique customer and user data from multiple sources into 360º client profiles, enriched with contextual attributes. Persistent means that it stores and updates customer information over time.
A database that is accessible to other systems refers to what I consider the most impactful feature of CDPs that sets it apart from all other customer data repositories or management systems: interoperability. Ideally, CDPs work to eliminate department data silos by unifying customer data under a single ID, and making it accessible to systems and departments that were previously limited to their own data stores.
“a marketer-controlled system that supports external marketing execution based on persistent, cross-channel customer data.”– David Raab, Founder at CDP Institute
CDP vs DMP vs CRM
As I’ve mentioned above, there are a lot of acronyms in the ad-tech world. Some of those refer to different types of customer data and attribute repositories or databases. CDP is one of them, and in understanding its function it helps to know the difference between the CDP and other platforms.
CDP vs CRM
The CRM normally stores first-party customer data and traditionally only deals with leads or clients. Unlike the CRM, CDPs collect first, second and third party information automatically and in real time from all available sources (with the CRM among those sources), and can do so, long before the prospect converts into a lead.
CDP vs DMP
The DMP (Data Management Platform) is one of the main tools used by digital marketers to collect second and third-party data for ad targeting and audience creation. There are some who (falsely) claim that the CDP is the new DMP, which is one of the main causes for confusion between the two.
While the DMP stores only anonymous information with user identifiers like browser cookies, the CDP can contain both personal data (such as name, email, etc.) and data provided by the DMP. In addition, the CDP is intended to build and draw value from increasingly detailed user profiles over time. The DMP, on the other hand, rarely retains user attributes beyond a specific campaign or project.
Who should employ a CDP?
CDP is a tool for data-driven marketing that enables, among others, user experience personalization on scale, and the consolidation of data from first, second and third party sources to support marketing activities and provide valuable insights.
Generally speaking, a CDP is your solution if you’re looking to solve one of the following issues:
- Your business has masses of customer data in data silos across departments that can bring added value to marketing activities if unified.
- You want to make effective use of first-party data in your digital marketing efforts.
- You’re looking to know your customers better through identity graphs and customer behavior analysis.
- You run multiple digital and offline marketing campaigns and want to consolidate customer data between channels and campaigns for a fuller view of each customer and their path to purchase.
- You wish to make use of first-party data in conjunction with second and third party data in programmatic advertising campaigns.
The Downsides and Hurdles
At this point you might think you’re ready to start researching best practices and top vendors for the CDP solution for your business. Perhaps you are. But before you do that, let us discuss some of the challenges and obstacles you might face and the downsides of employing a CDP.
Fitting it into your data management strategy
Alhough it might sound like one, a CDP is not a silver bullet capable of solving all customer data problems or a replacement for the multiple data repositories and data management solutions you employ. It’s an extension, that piggy-backs on to them.As marketers and publishers we are no stranger to data collection and it’s value. Before you choose a CDP or consider implementing one, think of the problems it will solve and what impact it will have on your existing data collection, data management and hygiene processes, as well as your identity resolution strategy.
Finding the right CDP
CDPs vary widely in scope and vertical specialty. Though intended mostly for outbound marketing efforts, the CDP in your organization can revolutionize service, sales and beyond. Assuming you plan out your uses cases correctly and choose the right CDP provider for your business goals, that is.
Collecting, processing, analyzing and returning data in real-time is a resource-heavy ordeal. Response time and latency are both affected by the volume of data and server resources, and when it comes to tagging and sorting large volumes of unstructured data, you simply can’t expect real-time responsiveness like you would from a DMP, for example. However, even DMPs have been the culprits of slowing down website performance.
When it comes to performance it’s more about how much data you’re using in a single instance than it is about the CDP itself.
Implementation / Set Up
CDPs are not a new concept. Enterprises have been experimenting with customer data consolidation for various purposes with in-house developed solutions, and few could afford the luxury of deploying and maintaining such a massive project. Even with the platforms available today, implementation can still be complex and costly. Some vendors offer AI/ML assistance in making sense of it all, but at the end of the day there’s simply no avoiding manual data mapping, classification and validation rules.
CDPs in the post-GDPR era
At first glance, it would seem that a tool like CDP would be at odds with privacy laws such as the GDPR in Europe and the growing trend for local privacy laws like the California Consumer Privacy Act (CCPA). Surprisingly enough, CDPs emerged as a solution for businesses to the hurdles of compliance.
The challenge at the heart of personalized and effective marketing and that of customer privacy protection for compliance purposes is one and the same: identifying the same person across multiple systems and databases. Why? Because it helps us know who the data belongs to.
For example, one of the regulations in the GDPR demands that companies grant people “the right to be forgotten”. To delete a person at their request from all your data stores, you would need to identify them on every single one. A CDP aims to unify the profiles, so identification is no longer an issue. In addition, having a unified user profile lets you ensure that their unique privacy preferences are applied across all marketing channels.
Top 10 CDPs
The number of CDP vendors seems to be growing from one week to the next, with startups launching their own CDPs and data giants like Salesforce and Oracle jumping into the game. One can only wonder how often the CDP Institute update their cetricified CDPs directory.
To help narrow down your search for the CDP and to help take your marketing personalization to the next level, we’ve picked the top 10 CDPs in 2019, each with their own unique offering (and not always calling it CDP).
The first major platform vendor to enter the CDP scene was Oracle with the introduction of CX Unity – a solution Oracle described as “CDP Plus”, aiming to replace “user journey maps” with a holistic view of each customer. One of the differentiating features of Oracle CX Unity is accelerated account-based marketing (ABM) aimed at B2B marketers.
Announced in March, the CDP component of the Adobe Experience Platform isn’t actually defined as a CDP by Adobe, but rather as a feature of the AEP that “brings together known and anonymous data to activate real-time customer profiles across multiple channels with “intelligent decisioning and segmentation.” One of the main differentiating features of AEP versus other platform vendors is that is boasts AI/ML capabilities powered by Adobe Sensei that is developed with marketer needs in mind.
In June, Salesforce jumped onto the CDP bandwagon by extending the capabilities of its customer identity unification solution, Customer 360, with the technology of MuleSoft, a company acquired by Salesforce. According to the announcement, “Customer 360 will go beyond traditional CDP capabilities and extend the power of CRM with consumer-scale data management and activation.”
Segment states “We make customer data simple”, and they do their best to deliver. With a free trial account and plug-ins to set up connections to over 250 services and marketing applications, as well as API support, Segment is probably one of the most user-friendly CDP platforms for marketers and developers alike. With names like Atlasian and Levi’s on their list of clients, Segment are putting up a good fight against some of the data giants mentioned above.
Keep in mind, Segment is more of data warehouse. It can, however, integrate with almost anything quickly and easily. This means that Segment can leverage the data it houses for pretty much anything, such as advertising or email marketing, with relative ease.
Aimed mostly at enterprises and major brands (like Canon, LG and Subaru), Arm prides itself on the ability to handle large numbers of data points to create unified customer profiles. In addition to the ability to collect online and offline data, Arm Treasure Data claims to be able to make use of data even from IoT devices.
Dubbing itself a “real-time customer data pipeline”, mparticle was recently named Best CDP Solution at the 2019 CODiE awards. Among its clients you can find brands like Airbnb, Burger King, NBCUniversal and Spotify who report mparticle to have a great user interface, which can be uncommon when it comes to CDPs.
However, while the interface is nice to look at and comfortable to use it is lacking in reporting and monitoring of the data connections and APIs being implemented.
Focused on B2B marketing, Lattice Atlas includes features like lead mapping to buying groups, accounts and account hierarchies. It can also automatically build your audience and highlights high-value accounts, and create and manage content for specific audience segments. Among Lattice Atlas users are Google, PayPal and Akamai, among others.
Optimove calls its service “Science-First Relationship Marketing Hub” and focus on leveraging data from multiple sources to craft better and closer relationships with your clients. The company has managed to build a solid reputation as one of the most user friendly CDPs capable of building reports on large data sets quickly.
Customizing their service offering for every client, Optimove is modular and flexible solution for those who like close guidance and custom-tailored implementation.
Primarily a real-time personalization engine, Evergage offers a CDP that focuses on interconnecting digital marketing data stores to serve as a central and unified hub for enriched customer profiles. With extensive identity matching and resolution capabilities, Evergage combines automated personalization with a comprehensive view of each and every customer profile.
Claiming to be the “The #1 CDP for Enterprise Brands”, AgilOne can be armed with a plethora of integration options to support interoperability with most data sources you can think of online and off. In addition, being enterprise-oriented, AgilOne gives special attention to GDPR compliance and scalability of CDP operations.
Managing Digital marketing with Big Data and Big Geo
For digital professionals, CDPs are quickly becoming a high value tool in their tool belt. As online businesses increasingly develop their global presence, data flows from around the world, which makes the effectiveness of marketing campaigns hard to manage and optimize. CDPs have been built with that in mind, as the category grows, segmentation woes decrease and marketing efficiency increases.
Creating segmented and effective digital marketing is where CDPs shine. However, many digital departments still lack the capabilities to QA and ensure that the segmentation they build using their CDP’s data is in fact accurate. This is where VPN based Geographic Campaign Testing Suites, such as Pangeo can solidify the process and ensure your campaigns are accurately targeting.