This year, we’ve seen tremendous growth within the Customer Data Platform (CDP) space (looking at you, 2024 Gartner® Magic Quadrant™ for Customer Data Platforms). It’s important to understand how we got here, and what it means for the future of the CDP space.
In our recent webinar, we sat down with Tealium’s co-founder and CTO, Mike Anderson, and Scott Brinker, Vice President of Platform Ecosystem at HubSpot and Editor at chiefmartec.com. Together, we discussed the evolution and future of CDPs. This blog acts as a recap of their discussion.
Before we get started, let’s define what a Customer Data Platform (CDP) is. The CDP Institute defines a Customer Data Platform as “packaged software that creates a persistent, unified customer database that is accessible to other systems.” Essentially, a CDP is a pre-built system that centralizes customer data from all sources and then makes this data available to other systems for marketing campaigns, customer service, and all customer experience initiatives.
According to Scott and Mike, the benefit of a CDP is to connect your Marketing Technology (MarTech) system and deliver concierge-level customer experiences on a massive scale. In our recent webinar, they agreed, “If you’re gathering data but not feeding it into your larger marketing operations, you’re missing out on data.”
While the Customer Data Platform (CDP) industry has greatly evolved over the years, some things remain the same.
As budgets tighten, software purchases are under more scrutiny. As a result, software that appears like a duplication, or is considered “nice to have, not a need to have” is often churned. When it comes to buying a CDP, look for one that reduces friction across the organization, delivers value, and gets implemented (and used) quickly.
As Mike mentioned, “Today’s CDP buyer is increasingly becoming an IT buyer. They are playing a bigger role, and are coming at it from a performance and scalability side.” But, why does IT have a bigger hand in the purchase of a CDP? We think there are multiple factors, but the most prevalent seems to be data governance. Your IT department should be thinking of privacy-by-design data management programs to process customer data transparently and follow new regulations and industry best practices. With Tealium iQ, you can get precise control over the data and the practices surrounding your vendors.
Within the realm of CDPs, the concept of the composable CDP has garnered considerable interest. A composable CDP is characterized by its “build it yourself” approach, leveraging a component-based modular architecture to offer enhanced flexibility and customization. However, the practical implementation of composable CDPs often poses challenges and can do more harm than good.
Using a composable approach has risks with complexity, scalability, maintenance, compliance, and cost. Organizations are becoming disillusioned with the composable CDP, and are turning to a packaged approach to get the most out of their CDP investment.
Businesses seeking a reliable, scalable, and efficient solution for managing customer data will likely find more success with a CDP like Tealium. Opting for a more integrated and streamlined CDP that prioritizes interoperability and simplicity will prove to be a wiser investment in the long run.
AI is becoming increasingly commonplace, and will likely have the same “accelerator” effects of transformation as the COVID-era. However, as businesses rush to adopt AI, they risk using bad data. Using bad data to fuel AI models can have disastrous outcomes and cost you customer trust! As Scott said, “Everyone is talking about AI strategy, but it really comes down to your data strategy.” Scott discussed how AI and ML are highly commoditized and are unlikely to be your differentiating factor… But what will be is the quality of the data that you can feed your AI models.
To get the best data, you’d benefit from a tool to assist you! We built Tealium for AI to help you get consented, filtered, enriched data in real-time for AI models and activate the results. Whether training data, data to feed the model, data for fine-tuning, or activating the results, Tealium connects your AI models to all your tools and customers.
In conclusion, The Evolution & Future of CDPs offered a lot of insightful content about the CDP landscape. For more tools at your disposal and to support your CDP future, we recommend you check out our Tealium products – Tealium for AI and Tealium iQ.
Gartner, Magic Quadrant for Customer Data, Lizzy Foo Kune, Rachel Smith, Benjamin Bloom, Suzanne White, Adriel Tel, David Walters, February 14, 2024.
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