The Gist

  • No CDP for you? According to the 2022 CDP Institute Member Survey, despite progress in unifying customer data, nearly two-thirds of companies still don’t use a customer data platform (CDP), leaving room for growth.
  • Keep the (unified) data coming. Unified data is the foundational benefit of a CDP, but companies fail CDP projects when they ignore data management issues.

While companies have made solid progress in unifying their customer data, nearly two-thirds still don’t use a customer data platform (CDP). This leaves copious room for growth, according to the 2022 CDP Institute Member Survey.

"It’s not surprising that 2/3rds of firms still haven’t licensed a CDP," said Tony Byrne, president of Real Story Group. "That said, we still see a lot of buyer interest and among RSG's own subscriber base we see some companies now going on their second CDP after making a too-hasty decision when the market was younger some years ago. This time they want to do it right."

Since the first survey in 2017, the number of respondents with a unified customer database has nearly doubled, from 21% to 38%. CDP deployments grew even faster, tripling from 10% in 2017 to 31% in 2022.

"A good reason not to buy a CDP is because your enterprise data house is not yet enough in order to exploit one," Byrne said. "So, if a firm is pausing their CDP investment for now, it could be for good reason. For example, that they’re addressing thornier issues of, say, identity resolution that you’d really like to tackle before implementing a CDP."

David Raab, founder of the CDP Institute, in 2013 coined the term "CDP," to describe marketing systems with the ability to create a unified customer database.

The institute's annual survey serves to provide insight into the current state of the CDP industry based on member responses from current or potential CDP users and industry vendors.

What Is a CDP?

CMSWire's 2023 CDP Market Guide projects that CDPs will become even more important to a company’s martech stack. And as the debate continues around the eventual sunsetting of third-party data collection (cookies), companies are investing more and more into first-party data collection and intelligence.

According to the guide, CDPs consist of three elements:

  • They need to be packaged software, a prebuilt system configured to meet the needs of each organization. While some technical resources will be needed to set up and maintain the CDP, it should not require the same skill and support as other data warehouse solutions, reducing cost, time and business risk. This allows market-ers and CX professionals to take ownership of the CDP and not be reliant on IT each time there are changes.
  • A CDP needs to be a persistent, unified database that can collect data from multiple sources and associate that data with an individual unified customer profile. A CDP doesn’t need to store all the data itself or take in every piece of customer data, but it should serve as a hub in the martech stack organized around providing a single customer view.
  • They need to be accessible to other martech systems. CDP data should be accessible and easily available to any other system. They should easily integrate with all the technology in your martech stack via API. They shouldn’t operate like an integrated software suite, where a system can only interface with other pieces of a proprietary software suite.

Related Article: Can CDPs Save Us From a Cookieless Future?

CDPI 2022 Survey: 5 Takeaways

Raab believes the foundation is in place for industry growth. He shared five key findings that emerged from 2022’s survey.

Exploring the Marriage of Unified Customer Data and a CDP

More than one-third of respondents report a unified customer database (39%) and nearly as many have a deployed CDP (31%). These figures have grown steadily over time.

Just 19% of respondents have both, but nearly all the companies that have unified data without a CDP are planning to add one. Those companies apparently see a CDP as a more efficient way to maintain their unified data, as a way to add new capabilities, or both.

Companies Benefit from Unified Data Without a CDP

Companies that have both a CDP and unified data have the highest satisfaction levels, and companies that have unified data without a CDP have levels that are higher than average. Companies that deployed a CDP without unified data have below-average satisfaction.

Learning Opportunities

“This reinforces the point that unified data is the foundational benefit of a CDP," Raab said. “A CDP that doesn’t include unified data isn’t likely to create much value.”

CDP Projects Fail When Companies Ignore Data Management Issues

All CDP users cite organizational obstacles and input data as the most common problems. But users who gain little value from their CDP are much more likely to also cite technical problems, either with the CDP itself or in connecting the CDP to delivery systems. Those users are also more likely to cite data activation goals as CDP benefits, while successful users are more likely to cite benefits related to data management.

Raab believes the unsuccessful companies focused their CDP research on activation use cases and failed to ensure their systems would also meet basic technical needs. Raab said it’s an easy mistake to make if you assume that data management features are the same in all systems — which is definitely not the case. 

Related Article: How to Filter the Right CDP Short List

Satisfaction With Martech in General Hasn’t Changed

A roughly consistent 60% of respondents say they are somewhat or highly satisfied with the return on their martech investments.

Companies with higher satisfaction are more likely to base their system selection on features and less likely to select based on available workers or cost. 

The CDP Industry Has Room to Grow

Retail and media were the earliest adopters of CDPs, but vendors now report high activity in financial services and travel. There’s growing interest in consumer goods, telecommunications, healthcare, tech and automative, too.

Raab expects all those to continue expanding. Respondents are still concentrated in the US and among large enterprises. Raab said this suggests ample room for growth in other regions and among smaller companies.