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Customer data platforms (CDPs) are at the top of every CMO’s wish list. The CDP space has exploded with $1.8 billion in venture capital investments in CDPs in 2019, according to Gartner research. As more vendors look to launch or acquire their own CDP solutions, the CDP market size is projected to grow from $2.4 billion in 2020 to $10.3 billion by 2025. And it’s easy to see what all the hype is about.
A true CDP promises marketers a clear-cut way to get value from an enormous quantity of customer data. For example, retail brand Aydinli used a CDP to optimise their customer targeting strategy and achieved an ROI of over 3,500%.
Similarly, Lids drove $250K in revenue on a single win-back campaign by using a CDP to identify valuable customers from millions of records. With these impressive results, it may seem like a CDP is the silver bullet for marketing revenue. But not all CDPs are created equal.
Many vendors are now positioning data solutions with CDP-like capabilities built onto their existing marketing clouds. Often, these offerings only address a piece of the larger data problem CMOs care about, delivering just another data warehouse or management tool — not a fully integrated data ecosystem. For CMOs looking to invest wisely in their marketing tech stack, distinguishing a true CDP from a CDP-like solution can be confusing.
Currently, just over a dozen CDP vendors, including Acquia, have been recognised as demonstrating all of the core capabilities required to be RealCDP certified by the Customer Data Platform Institute. Among these CDP elite, the Acquia Customer Data Platform stood out as the only RealCDP to earn a perfect score, fulfilling every requirement within diverse categories including analytics, personalisation and real-time customer profiles.
With CDP adoption on the rise, we want to help clear away the confusion by defining the key things marketing executives look for when evaluating which CDP is right for them.
CDPs Should Represent a Single Source of Truth
Without a central and accessible platform for customer data, it is impossible to agree on one source of truth. Each team uses a tool that has its own set of data in its own format, with no way to get these tools to communicate with each other and share information. For marketing and sales teams, that can mean unclear lead attribution, duplicated efforts and lack of context into the full customer journey.
A true CDP breaks down these walls and offers data everyone can trust. By using a CDP that consolidates and stitches together data from your CRM, marketing automation, call-centre records, etc., it becomes infinitely easier to create personalised customer profiles and segments. Marketing leaders can be confident they’re targeting the right people with the right messages. This means no more wasteful wide-net campaigns sending discount codes to your entire email list or spending money on digital advertisements that aren’t in-sync with what your audience truly cares about.
And a CDP isn’t only for B2C brands. B2B companies can also use these unified customer insights to optimise their ABM strategy. Your marketing teams should be able to recognise patterns across all of your data and understand which prospects and target accounts have already demonstrated an interest in your brand or services. With a solid data foundation, marketers can narrow their focus on these high value target accounts.
CDPs Should Improve Marketing Efficiency and Keep Data Analysis In-House
It often takes days or even weeks for a global organisation to manually collect, dedupe and cleanse all the data needed for marketing campaigns. For marketing executives, this means one of two options:
- Having your teams manually pull enormous volumes of records, taking their time away from more strategic, valuable work.
- Outsourcing your data to a third-party vendor, which can be expensive and inhibit your team’s ability to be agile and activate the data they need in real time.
As a CMO, I always prefer to invest my budget directly in my marketing team rather than hiring outside analysts and specialists. A CDP gives marketers control over their data immediately, so they won’t waste time matching and deduping records. However, many of the closed marketing clouds that have recently announced their own CDP-like products don’t actually live up to the promise of a persistent and standardised customer database, lacking features like identity resolution that are critical to establishing a complete and accurate customer profile.
A mature CDP reconciles everything into one definitive profile that serves as the guiding light for all marketing activities. Before leveraging a customer data platform, Acquia’s marketing operations team was building manual segmentations over multiple days and dealing with frustrating records limits or performance lags from third-party tools. With the CDP, building segments and deploying hyper-targeted messages takes minutes!
CDPs Should Empower Marketers to be Proactive and Future-Ready
Marketers need data solutions that are proactive and anticipate the next best customer experience. ML and AI capabilities are needed to do effective data-driven marketing at scale. With customisable machine learning models, marketers can easily understand different customer behaviour patterns and preferences and proactively identify personalised content. The ability to configure and build ML models for unique business cases offers a major competitive advantage over most static CDP offerings that only provide users with pre-set and fixed data models to choose from, limiting the insights you can access.
Our vision of a future-ready CDP means a platform that’s intelligent through powerful machine learning capabilities and adaptable to change through open technology and integrations. Legacy marketing clouds like Adobe and Oracle lack connectivity and flexibility with tools beyond their own portfolio and may struggle to communicate data from across a brand’s entire marketing ecosystem. When a CDP won’t allow data to flow freely between systems or communicate with other tools, it falls short of that essential single source of truth promise. If a platform can’t capture the 360-degree customer experience CMOs expect, should it even be given the CDP label at all?
Customer data platforms must be open and interoperable with any channel, device or system where customers are engaging. That requires open marketing technology that seamlessly integrates with any tool and can extend beyond a few select purposes or industries.
The widespread adoption of CDPs will continue to spread as marketers realise that CDPs aren’t just valuable for retailers or big organisations backed by large swathes of data scientists. In fact, in 2020 mid-size organisations in spaces like manufacturing, media and healthcare represent some of the highest adoption rates for all CDP users. With so much attention and change in the market, we expect to see lots of consolidation over the next year. And the vendors who rise to the top will be those who have a proven vision for activating their data, not just sitting on it.