The Rapid & Sudden Rise of the CDP

 In Martech

Coming out of the Martech conference, we’re highlighting 3 industry insights that marketers should be aware of as they continue to innovate at the intersection of people, processes and tools. Below is part 3 of our 3-part series covering: (1) The mental state of the modern marketer regarding technology, (2) Platformization and the march from task-based silos toward enterprise orchestration and (3) The rapid and sudden rise of CDPs (below)

The Rapid and Sudden Rise of the Customer Data Platform (CDP)

At any marketing technology company there are challenges when deciding what category is the proper fit for your technology. It was especially interesting this year at MarTech San Francisco as the category that best fits our AudienceStream product, Customer Data Platforms, was a star of the whole conference because this new category precisely solves one of the biggest pain points emerging in the market – data fragmentation and activation.

One of my favorite quotes from the conference came from Praveen Palepu, director for the Microsoft USA Central Marketing Organization. He stated, “the next wave of innovation is interoperability,” when discussing Delivering Business Results with Marketing Technology. “Interoperability” is at the core of what CDPs were created to do.

For all the reasons above, about the mindset of modern marketers and the march towards enterprise orchestration, CDPs were in the spotlight at MarTech. But as exciting as the emerging CDP category is, there are quite a diverse array of capabilities and approaches being taken in this new space. While they all claim to solve the problems described above, they all do it in varying ways that may or may not lead towards a reprisal of the nightmare rat’s nest of technologies pointed out earlier that’s very difficult to untangle once created.

The CDP Institute defines CDPs as, “a marketer-controlled system that maintains a unified, persistent customer database which is accessible to external systems.” From that perspective, the 3 main criteria are, (1) marketer-controlled, (2) unified, persistent customer database, and (3) accessible to other systems. From that perspective, we can see how CDPs have attacked a crippling pain in the market.  

Let’s explore each of those criteria a little closer as it relates to MarTech industry trends at large and in relation to the varying approaches being taken by CDPs…

  1. Marketer-Controlled – This criteria is trying to get at the fact that there shouldn’t be barriers for anyone to make use of data. Historically, these barriers have been technical expertise like programming and coding. However, only focusing on marketers can create a silo itself. And marketers aren’t the only ones in an organization powering customer experience, so ideally a more universal approach would be taken. By aiming to make data easy for marketers, though, CDPs can democratize data thus breaking down the task-based siloes from a technological and organizational perspective, which ultimately leads towards more customer-centric organizations.

  2. Unified, Persistent Customer Database – With all the systems and teams (aka siloes) working on customer experience related activities, the need to unify data about a particular prospect or customer has become more acute.  Beyond that, the capability to expand and modify that unified customer profile (unique to each individual person) over time so that the profile remains intact across devices and venues is critical.

    Maintaining consistent experiences has become a common characteristic of market leaders and one of the most widely identified frustrations of consumers. Without this single view of the customer, it’s virtually impossible for organizations to move towards enterprise orchestration. Customer-centric initiatives are bound to fail without an accurate and actionable view of the customer based on ALL of an organization’s data (even beyond marketing data).

  3. Accessible to Other Systems – All the insights in the world won’t create any value unless they’re actionable. That’s why accessibility is so key. This accessibility is the ‘interoperability’ referenced by Microsoft earlier, and ultimately one of the primary reasons why CDPs have so much momentum in the market. This is also why it’s puzzling that some CDPs are focusing on upstack execution tools, ostensibly broadening their focus from solving foundational data fragmentation and unified customer profile issues to competing with best-in-class, market-leading solutions for tasks like content personalization, analytics visualizations, reporting and so on.

    Forward-looking organizations need to be careful of the CDP approach they choose because picking the wrong approach for the sake of an “all-in-one” dream can lead you straight back to a rat’s nest nightmare. From looking at the evolution of the industry as told above, it’s clear that data fragmentation should be solved at a foundational level and not mixed with upstack execution that drastically changes as consumer behavior evolves and new technology solutions emerge.

All in all the MarTech conference is an awesome opportunity for marketers to get an overview of the whole technology landscape out there that’s emerging and really step back to take stock of where this is all headed.  By this point it should be clear that change is here to stay, so we need to start planning for change in a way that allows us to be customer-centric.  That way is treating known and unknown customer data as the foundation for business. Specifically, centering the organization around the data that comprises a unified customer profile in a way that is flexible and actionable will allow companies to be more customer-centric over time.

Your solution to the data fragmentation problem should be accessible to other systems so that insight becomes action in a consistent way across devices and channels. The solution should be vendor neutral and flexible so that the data can be applied no matter how consumer behavior changes and no matter what great technology comes out next. And this solution should be available across the whole organization so that customers don’t have uneven experiences.  The fun part is making this work, and hopefully figuring out that the way forward isn’t quite as daunting once you take a step back and see where the market is headed.

In case you didn’t see part 1 & 2 of our 3-part MarTech Conference series, check out the links below:

Part 1: The mental state of the modern marketer regarding technology

Part 2: Platformization & the Evolution from Task-based Silos to Enterprise Orchestration

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