The customer data platform (CDP) vendor industry has welcomed more providers with delivery and campaign capabilities, according to recent findings from the CDP Institute. The emerging categories of CDP providers reflects the growing state of the industry: the industry, estimated now at $1 billion, saw six-month growth in the latter half of 2019 with 14 more vendors, 1,300 employees and $236 million in cumulative funding.
Numbers aside, what do these emerging campaign and delivery capabilities for CDP mean for the marketers who ultimately sit at the buying table? It means they have more work to do selecting these technologies, including a thorough assessment of what’s already in their marketing technology stacks and how much customization and integration work they can handle.
The Onus Is on the Buyer
Unfortunately, some vendors have contributed to the confusion surrounding CDP. A CDP benchmark by the Winterberry Group and CDP vendor BlueVenn found a marketplace “confused by the multiple definitions and rapid pace of evolution within the category, leading to misconceptions and, ultimately, marketer disappointment when lofty promises (or expectations) are not met.”
“CDP buyers need to understand the differences and look for the things that really are a good fit for them, which is harder than it sounds,” said David Raab, founder of the CDP Institute. “Because sometimes people just say, well, more is better. Why wouldn’t I want a delivery CDP that gives me everything? But then you’re going to end up paying for stuff you don't use. There are complexities involved. There are assumptions built into the product design that if you don't use the product in a way that it's intended might actually be a disadvantage.”
If you buy a campaign CDP, for instance, but decide you want to use a different campaign tool in the marketing technology (martech) stack, that campaign CDP may not expose its data to external campaign tools. It perhaps was not designed with integration in mind. “So it’s a lot of work for users to figure out what kind of CDP they want to focus on,” Raab added.
Know your gaps. If you have a campaign system that you're comfortable with, then you probably don't need a campaign CDP. “Switching is always painful so avoid if you can, and it’s similar with delivery CDPs. If you’re comfortable with your delivery systems, then why would you want to switch them out? Although I will say delivery systems are actually the easiest thing to replace.”
Related Article: Will the CDP Marketplace Consolidate in 2020?
4 CDP Categories: Data, Analytics, Campaigns, Delivery
The first place to start an assessment on CDPs is understanding what’s out there. Last year, Raab said he saw a very distinct split in the CDP market between companies that focus on data assembly and those that focus on activation. In its report last month, CDP Institute groups CDP vendors into four categories based on the functions provided by their systems:
- Data: Gather customer data from source systems, link data to customer identities, store the results in a persistent database available to external systems. Often employs specialized technologies for data management and access.
- Analytics: Provide data assembly plus analytical applications. Include customer segmentation and sometimes extend to machine learning, predictive modeling, revenue attribution and journey mapping. Often automate the distribution of segment lists to marketing automation or advanced analytics products.
- Campaigns: Data assembly, analytics and customer treatments. Specify different treatments — personalized messages, outbound marketing campaigns, real time interactions, or product or content recommendations — for different individuals within a segment.
- Delivery: Data assembly, analytics, customer treatments and message delivery. Delivery is typically through email, website, CRM or several of these.
The delivery and campaign CDPs -— which Raab found emerging lately — include a “mix of small new companies designed from the start as CDPs and larger established firms that have added CDP capabilities. Several of the larger data-focused CDPs have sharpened their positioning to distinguish themselves from CDPs with broader capabilities.”
Do We Need ‘Campaign’ and ‘Delivery’ CDP Distinctions?
One CDP vendor challenged those CDP distinctions. Steve Zisk, senior product marketing manager at Redpoint Global, said he finds the distinction between “campaign” and “delivery” CDPs “a bit awkward” because CDPs are supposed to be giving buyers a choice of channels, and all CDPs can deliver customer records. Many, he added, can deliver messages/content, to martech touchpoints.
“Delivery CDPs may be CDPs that own an endpoint; i.e. an ESP, to provide unified UI and/or control,” Zisk said. Redpoint uses the native APIs for endpoints to directly deliver messages to customers and to bring back responses and results. “The correct distinction should be whether the CDP can do the last-mile orchestration, delivery, measurement and optimization in a consistent way for all channels,” Zisk added, “not whether the CDP vendor happens to own/control the touchpoint.”
Some other ways Zisk and Redpoint see the CDP industry break down includes:
- Every CDP does data collection, but they don’t all do the same thing. For many CDP buyers, they want data not only from martech sources, but from all of their enterprise back-office sources as well, meaning CRM, POS and ecommerce systems, customer service systems, data warehouses and data lakes.
- Every CDP does profile unification, but many do a mediocre job of it. There’s little emphasis on the data quality; i.e. cleansing, validation, normalization, which is crucial for data that may be sourced from imperfect human collection processes, like CRM records or self-service portals.
- Most CDPs do segmentation by calculating segments and attaching IDs to the customer record, or by filtering customers just before activation. This list-based segmentation makes it much harder to create dynamic, flexible, “in the moment” interactions with customers.
Related Article: Hyper-Personalization: Why a CDP Isn't Everything
Analytics, Applications, Marketing Clouds, B2B
Winterberry’s report released in December groups CDPs in these segments:
- CDPs with strong capabilities in gathering customer data from source systems that leverage a combination of integrations (API, SDK and/or tag management) to ingest data.
- CDP with analytics, which provide data ingestion, integration and profile management, plus analytical applications (including predictive modeling, segmentation, and attribution).
- CDP with applications, which provide data ingestion, integration and profile management plus engagement applications (e.g. journey mapping and activation tools for both inbound and outbound communications, personalized messages, predictive recommendations, etc.).
- Marketing clouds, such as solutions that integrate a wide variety of mostly-acquired solutions, the majority of which focus on customer engagement, with the goal of being a one-stop solution for marketers.
- CDP for B2B specifically: CDPs that focus on B2B use cases and applications; the majority have emerged from ABM platforms.
The top use cases for a single customer view, according to marketers, are personalization (70%), customer insights (65%) and measurement across channels (51%), according to Winterberry.
CDPs That Look Like Mini Marketing Stacks
Michael Harrison, managing partner at the Winterberry Group, told CMSWire his team sees a bifurcation of the CDP market, including CDPs designed to solve mid-market issues, which look similar to mini marketing stacks. This group of CDPs, Harrison said, is relatively adept at the core CDP capabilities: ingest and integrate data, profile management (i.e., universal view), real-time segmentation and activate data across the marketing ecosystem. “These CDPs are building out or acquiring advanced analytics, and applications such as email and personalization,” Harrison added. “The mid-market marketers need ease of implementation and are less sophisticated in their approach to managing and activating data and prioritize simplicity over best-in-class.”
Related Article: What You Need to Know About Operational Customer Data Platforms
Doubling Down on Data Integration, Activation
CDPs focused on solving enterprise needs are doubling down on the data integration and activation issues, Harrison also found. They are building out best-in-class data integration, identity resolution and decisioning/orchestration. “This group of CDPs is not looking to compete with enterprise marketing stacks, but rather work with the stacks and make the flow of data seamless,” he said. “Enterprise brands often leverage multiple marketing stacks; often, Adobe and Salesforce are leveraged by different groups within the organization, and a best-in-class data CDP eases the sharing of data between the two systems.”
Three Important CDP Flavors: Access, Analytics, Campaign
According to the CMSWire Buyer's Guide Customer Data Platforms (CDP), CDPs can be classified into three types: Access(Base), Analytics (Base Plus) and Campaign (All-in-One). Access CDPs ingest customer data from multiple sources, combining and linking that data to customer profiles. Analytic CDPs have the data management functionality of Access CDPs with expanded analytical and visualization features. And Campaign CDPs are all-in-one systems that provide data management, analytics and orchestration capabilities.
Data-First, Specialized CDPs
It’s becoming clear that the CDP space is rife with confusion, according to Jeff Lunsford, CEO of CDP provider Tealium. “Vendors have wildly differing capabilities that address a multitude of problems, from data quality and portability to real-time triggering of campaign events,” he said.
To help clear the confusion, Lunsford and Tealium see a distinction between the two major types of CDPs: data-first CDPs and specialized CDPs:
- Data-first CDP: A data-first CDP prioritizes the quality of the data being collected and transformed for use, according to Lunsford. It builds an independent data layer that all systems can tap into for timely and consistent customer data. “Put another way, a data-first CDP treats data as its own asset to be optimized, rather than just a means to an end,” he added. “This makes it easier to control data quality across the organization, which ultimately aids in building trust in data. It also enables robust data governance features that are increasingly necessary to comply with data privacy regulations.”
- Specialized CDP: This group is more geared toward execution and outcomes rather than data quality. Because of this, they often end up specializing in a particular department — usually marketing — and use cases, such as email marketing, data management platform (DMP) functionality, analytics reporting or other channel-level action execution.
Determining the Right Use Case
CDPs also differentiate in the use case/user department, according to Zisk. “This is not a continuum, he said, “but a set of capabilities to satisfy a potentially broad set of users and use cases. Some CDPs can go beyond marketing use cases to provide customer records, decisions and information for customer services, in-store clienteling and call centers.” Others offer functionality to respond to or orchestrate subject requests for GDPR, CCPA or other privacy requirements; some can handle unusual customers, like healthcare consumers in care management environments, and some can handle distributed marketing use cases, with centralized controls for customer data, prebuilt templates and rules, and the ability to allow marketers to launch and manage campaigns specific to local needs for products, content and channel controls.
“Marketers need to spend the effort upfront to develop the use cases that need to be solved,” Winterberry's Harrison said. “The exercise will prepare marketers to align their current, and future state needs to the right technology and provide an implementation roadmap with wins along the journey. With so many variations of CDPs in the market, licensing a CDP is not a strategy. We have heard numerous accounts of brands not satisfied with their CDP. CDP vendors over-promising and brands not aligned on their needs are causing the dissatisfaction in the marketplace."