What are Customer Data Platforms?
CDP or customer data platform, has developed almost overnight as yet another must have that every marketing team looks to add to their technical utility belt. But what exactly is CDP?
View Data Jobs
CDP market is ramping up in 2021. Climbing from $740 million in 2018 up to a staggering $2.4 billion in 2020 and is predicted to hit $10.3 billion by 2025. The number of CDP platforms is picking up too which supplements this rising market value. Salesforce announced that their customer 360 platform will now be a CDP, then Adobe jumped in to say they’re getting one too. Not to be outdone, Oracle also enlisted the help of Accenture and Capgemini to help them figure out CDP.
What is all the fuss about?
The compounding challenge that marketing teams face today is they want to deliver connected experiences to their audiences. Consumers expect more than a personalised experience, instead they want every brand interaction to be a connected experience that matches their actions and behaviours based on “in the moment data”. For example, by triggering emails based on the customers recent website engagement or an instore purchase. To do this you need to know exactly how they’re interacting with your channels and content.
However, the barrier marketers are facing is data. While the data exists, it’s very fragmented and the systems that manage this data were actually built in a different era. Customer data resides in CRM, purchase data in a point of sale systems, web data in another system and so on. These data sources are increasing. In 2017 the median number of data sources used by marketing organisations was 10, and 12 in 2018, and 13 in 2019 – this is an uphill struggle.
Why are marketers chasing this magical Unicorn?
Some marketers enlist the help their IT team to extract this data from these separate data sources. Others import all this data into their digital marketing platform for segmentation. However, these approaches are fundamentally flawed as complex segmentation requires SQL modelling – which calls for considerable expertise and effort. They inherently lack flexibility and the end result is a series of large independent data sets. The problem then becomes that you can’t easily adapt without serious effort and skills. In fact, a recent study 81% of IT leaders say the point to point integration creates some of the biggest headaches they’ve seen.
However, CDP is designed with exactly these problems in mind. It integrates disparate data sources by using complex matching algorithms to unify identifiers across different data sets to create a single customer view. Then it goes on to break down the barriers of traditional segmentation approaches by offering tools that enable marketers to build complex segmentation without code. Then immediately provides service insights like audience size after segmentation showing how audiences overlap. Most importantly providing actionable reporting so individuals in an audience can immediately receive communication or be inputted into a customer journey. This is critical as in the new marketing funnel leads can enter at any stage so audiences need to be highly pliable.
In summery a CDP enables data integration, orchestration, data segmentation and that all important single customer view. Putting all of these important data bundles in the hand of marketers.
Big Data: Data Driven Marketing