Customer data platform defined
A customer data platform (CDP) is a prepackaged, unified customer database that pulls data from multiple sources to create customer profiles of structured data available to other marketing systems. Gartner defines a CDP as “a marketing technology that unifies a company’s customer data from marketing and other channels to enable customer modeling and to optimize the timing and targeting of messages and offers.”
The digital sources that feed CDPs may include:
- Behavioral data from a website, app, or related channels, such as live chats or digital assistants
- Transactional data from ecommerce or point of sale (POS) systems
- Demographic data, including names, birth dates, and addresses
Once collected, cleansed, and combined, this data forms a superset of customer data that can be segmented to create highly personalized marketing campaigns.
Customer data platform benefits
CDPs help organizations understand their customers, build audience relationships, and drive revenue. While a wide range of teams within a company may benefit from a CDP, such platforms are most beneficial to marketers. Data management consultancy, BitBang, says CDPs offer five key benefits:
- As a central hub for all your customer data, they help you build unified customer profiles. These profiles help you understand each customer’s journey. They eliminate data silos, and, unlike a traditional data warehouse, CDPs don’t require technical expertise to set up or maintain.
- Bringing all that data together helps you deliver personalized experiences to each customer. You can use them to create personalized, relevant campaigns.
- More thorough understanding of each customer helps you increase customer satisfaction.
- The central data hub simplifies the use of that data with AI and automation.
- By applying machine learning to the data, you can better predict customer behavior.
Types of CDPs
Gartner has identified four main types of CDPs: marketing cloud CDPs, CDP engines and toolkits, marketing data-integration CDPs, and CDP smart hubs.
Marketing cloud CDPs: These platforms work with established marketing CRM and email service provider (ESP) tools such as those offered by SAP, Adobe, Salesforce, Microsoft, Oracle, etc. The vendors tend to be well-established cloud providers. They have strong integration within their own ecosystem.
CDP engines and toolkits: These technical tools are for organizations seeking to build their own solution. IT teams use them to develop tailored applications on top of a CDP. They tend to require a lot more technical know-how but enable organizations to tailor their CDP to their specific needs.
Marketing data-integration CDPs: These CDPs focus on data operations, with powerful data manipulation and governance capabilities, but with non-technical, user-friendly interfaces. They tend to be more “pure-play” platforms geared for gathering and organizing first-party data, so frequently need to be used with additional data visualization platforms.
CDP smart hubs: These platforms emphasize marketing orchestration and personalization, with the ability to time and target responses based on user behavior and event data. They typically have easy-to-use backend interfaces.
Customer data platform vendors
According to Fortune Business Insights, the global customer data platform market was valued at $1.16 billion in 2021 and is projected to grow from $1.42 billion in 2022 to $6.94 billion by 2029, a CAGR of 25.4% over the period. Vendors are investing heavily in these platforms, driven by marketers’ need to collect and analyze ever-increasing amounts of customer data across channels. Here are some of the current top CDP vendors.
Adobe Experience Platform
Adobe Experience Platform is the CDP offering of the Adobe Marketing Cloud. It’s geared for data teams within IT departments, who configure it to pull together customer identity across the Adobe Marketing Cloud and then push the profiles to various point solutions.
Amperity is an identity management CDP that has risen to prominence as the deprecation of third-party cookies becomes more likely. It is designed to store PII across channels and rationalize multiple representations of the same customer. It requires SQL for optimal use, so is best suited for data engineers and analysts.
Bloomreach Engagement is a real-time platform that combines a CDP, email service provider (ESP), AI, marketing automation, and web personalization. It offers data assembly, analytics, campaign orchestration, and message delivery via natively integrated channels.
BlueConic is a website personalization CDP designed to help businesses manage tailored content and offers across websites and mobile apps. It prioritizes speed over advanced segmentation and scalability. It’s designed for business users, particularly ecommerce teams.
Salesforce Interaction Studio
Salesforce Interaction Studio is a personalization and interaction management solution for the Salesforce Marketing Cloud. It’s designed for ecommerce teams that manage website personalization.
Segment made a splash when it was acquired by cloud communication platform vendor Twilio for $3.2 billion in November 2020. Segment is a data-integration CDP designed to collect data and then distribute it in real time to other systems. It’s intended for IT teams and has historically found its niche in small and midsize businesses.
Treasure Data CDP
Treasure Data CDP is a data science CDP built for predictive modeling and advanced analytics. It’s intended for data scientists seeking to extract insights from customer data and measure marketing performance.
Customer data platform vs. CRM
CDPs and customer relationship management systems (CRMs) are closely related but distinct.
“The difference between a CRM and a CDP comes down to this: CRMs help manage customer relationships, while CDPs help manage customer data,” explains Geoffrey Keating, head of content marketing at CDP vendor Twilio Segment.
Both types of system collect customer data, but CRMs help you organize and manage customer-facing interactions, whereas CDPs focus on customer behavior with your product or service, such as the channel through which they found your organization or how they behave within your product. It’s also worth noting that CRMs are intended to assist customer-facing roles such as sales, whereas CDPs support non-customer facing roles, like marketing, product, and leadership.
Customer data platform vs. DMP
CDPs and data management platforms (DMPs) both use data to build audiences for marketers and so are frequently confused for one another. The difference between the two types of platforms comes down to three things: the data they use, how they use customer identities, and data retention.
CDPs mainly rely on first-party data: data from behavior on your website or apps, data from your CRM, subscription data, social data, etc. You may enrich the data in your CDP with second-party data: another company’s first-party data purchased directly from the company that owns it. DMPs, on the other hand, primarily leverage third-party data enriched with some second-party data. Third-party data is collected by a data aggregator that pulls it from various platforms and websites and then sells to its customers.
Customer identities are a key reason for the differing types of data used by the platforms. CDPs are intended to track the actions of individual customers for better insights, so they tend to rely on personally identifiable information (PII), including full names, email addresses, transaction data, social media interactions, etc. In general, customers must opt in to inclusion in a CDP. DMPs, however, use anonymized data. As a result, DMPs are primarily useful in advertising, helping with ad targeting and improving media buying efficiency. CDPs are more broadly useful to all of marketing.
Data retention is the third big differentiator between CDPs and DMPs. CDPs tend to retain data for a long time and are frequently designed to enable customers to request access to or deletion of their data. DMPs tend to retain data for a short time before refreshing it with new, anonymized data. This helps advertisers make their decisions based on the freshest data.
Customer data platform examples
According to CDP vendor Treasure Data, the top six popular use cases for CDPs are:
- Personalization: CDPs enable organizations to tailor digital customer experiences across every channel, whether it’s the look-and-feel of a channel, content tailoring, personalized messaging, etc.
- A unified view of the customer: CDPs serve as a single record of truth about customers, delivering a 360-degree unified view of individual customers, regardless of channel.
- Omnichannel marketing: CDPs support omnichannel marketing efforts, while helping organizations manage their data with appropriate compliance controls and features.
- Data integration and management: CDPs ingest structured, unstructured, and semi-structured data, which can be stored without modification or reformatted and unified as needed.
- Data privacy and governance: As a single source of truth for customer data, CDPs make it easier to attain compliance with various data regulations and to stay in compliance.
- Marketing automation: CDPs can work in tandem with marketing automation systems (MASes) by providing advanced AI and machine learning tools.