Marketers continued investing in CDPs despite budget cuts during the pandemic, recognizing the technology’s central role in addressing third-party cookie loss and more.
The pandemic shifted marketers’ priorities
All of the organizations in our survey (100%) saw at least some marketing budget cuts due to COVID-19, and 41% saw cuts over 20%. Though the pandemic made organizations more reliant on digital channels for reaching their customers, most marketers couldn’t afford to invest in new tech solutions. More than three-quarters (77%) of organizations cut tech initiatives in 2020 due to COVID-19.
At the same time as budget cuts were forcing them to do more with less, marketers shifted their priorities to address new challenges caused by the pandemic. For marketers without a developed first-party data strategy, the demise of third-party cookies made it harder to manage ad spend across digital channels. Tighter budgets made customer acquisition and retention more difficult. And finally, the restriction or elimination of in-person experiences put incredible pressure on marketers to offer a unified customer experience across channels — particularly digital ones.
“More than three-quarters (77%)
cut tech initiatives
in 2020 due
Top marketing priorities that became more important due to COVID-19
Managing ad spend across multiple digital channels
Acquiring new customers
Providing a unified customer experience across channels
Retaining existing customers
“Now, the emphasis has shifted to managing data across multiple channels and resolving customer identity.”
Our results suggest that marketers are using their CDPs to address these challenges head-on. For example, in our 2020 report, respondents reported various forms of real-time functionality were the most useful capabilities of a CDP. Now, the emphasis has shifted to managing data across multiple channels and resolving customer identity — which are important for delivering seamless digital experiences in a post-cookie world.
Change in top most valuable functionalities of a CDP year over year
Visitor stitching/identity resolution
Ability to ingest online data from multiple channels
Ability to activate data in real time by automatically triggering campaign modifications and other events
Ability to collect and transform
data in real time
2021 may see a rise in CDP investment
Despite the drop in tech investment overall, there wasn’t a drop-off in CDP investment during COVID-19 — likely because CDPs are so important for addressing marketers’ pandemic-related concerns. Eighty-nine percent of marketers we surveyed had a CDP, and nearly a tenth (9%) had adopted a CDP since the beginning of the pandemic in March 2020.
In 2021, marketers will make up for lost time by increasing their tech investments. Eighty-nine percent of organizations will spend more on tech in 2021 than they did in 2020, and almost one-third (32%) will spend significantly more. Perhaps because they were hit harder by the pandemic, travel and hospitality marketers were most likely to say they’ll spend significantly more. The big question: Where will marketers allocate these funds in 2021?
“The big question: Where will marketers allocate these funds
Marketers understand that CDPs are key to unlocking the full potential of first-party data. A CDP can anchor a robust customer data supply chain that frees your organization from excessive reliance on third-party data. It can also enable accurate attribution of ad spend and channel, enabling more effective ad spend management. Finally, a CDP supports a unified customer experience across channels, built on first-party data acquired with customers’ consent.
With third-party cookie loss, a first-party data strategy is no longer optional. As tech spending rebounds in 2021, look to invest in a CDP that is equipped to meet the challenge of third-party cookie loss, while also supporting better customer experiences.