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Marketers face a growing gap between what they need from their customer databases and what those databases actually can do — and the problem is worsening as the numbers of channels and customer expectations both grow.
That was the ominous warning marketing consultant David Raab sounded three years ago.
Raab, principal of Swarthmore, Pa.-based Raab Associates, said marketers need better customer databases — and in 2013 coined the term Customer Data Platforms (CDPs) for a new class of systems that help them do exactly that.
Customer Data Platforms to the Rescue
Today Raab Associates is emerging from stealth on a new project: the Customer Data Platform Institute, a vendor-driven trade association established to educate marketers and marketing technologists about CDPs.
Raab Associates, an independent technology analyst firm, defines a CDP as a marketer-controlled system that supports external marketing execution based on persistent, cross-channel customer data. In simple terms, the platforms make it easier for marketers to build the elusive Single Customer View from a variety of data.
The new Customer Data Platform Institute offers marketing professionals a variety of educational materials, including a library of white papers, surveys, evaluation guides, case studies and product information; a daily newsletter with industry news and opinion; a public forum; and a directory of industry vendors.
It's sponsored by 10 CDP vendors — AgilOne, Ascent360, BlueConic, BlueVenn, Ensighten, Lytics, mParticle, RedPoint Global, Segment and Treasure Data — and managed by Raab Associates.
Why CDPs?
CDPs can solve marketers’ biggest data problem: building a unified customer view. As CMSWire contributor and digital marketing consultant Anand Dorairaj wrote in 2014:
- Every marketing organization aspires to have a single view of their consumer — to track interactions across channels, identify behavior patterns and build correlations to influence multichannel strategies. The insights that every tracked consumer engagement can provide, is like gold-dust,' they claim.
"But awareness of CDPs is still very low," he added. “The Institute will educate marketers about CDP capabilities and to help them take full advantage of these powerful new systems.”
For the most part, marketers are still struggling to find their data. And that's problematic because "grand theories of customer optimization collapse if they are not built on a solid foundation of integrated customer data," he said.
In fact, trying to use the myriad marketing technologies now available without an integrated customer view is like having a great car but no roads to drive on.
"Marketers can't do any of the cool stuff like personalization or predictive modeling without a unified customer view," he said.
"A CDP isn't sexy. It's plumbing. But it's extremely important."
CDPs Are Specifically Built for Marketing
CDPs are alternatives to systems that have largely failed to deliver a unified customer view, including enterprise data warehouses, data management platforms (DMPs) and channel applications such as email engines, Raab said.
Unlike those approaches, CDPs are specifically built for marketing uses, incorporate first party data including personal identifiers, and are open to access by all company systems. "This lets them succeed where other approaches have not," Raab added.
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CDPs vs. DMPs
CDPs work with both anonymous and known individuals, storing personally identifiable information such as names, postal addresses, email addresses and phone numbers, while DMPs work with almost exclusively with anonymous entities such as cookies, devices and IP addresses, Raab explained.
A CDP is built with advanced identity matching and flexible data storage.
It provides either a prebuilt marketing database or tools that greatly simplify database creation; connects with other systems that deliver marketing messages such as emails, web pages, telephone calls and direct mail; and keeps a permanent record of each customer’s data, allowing it to identify and react to changes over time.
CDPs Fill Technology Gaps
Raab said "the need for CDPs is clear" — a declaration supported by several 2016 studies.
According to a survey released this month by LiveRamp, an Acxiom company, nine out of 10 marketers describe an omnichannel view of the consumer as important for effective marketing. But only 17 percent have the ability to create such a view.
An April report from Experian Marketing Services found technology issues were the biggest barriers to delivering a unified customer view, far outranking non-technical issues such as timeliness, lack of data or poor data quality.
“Today’s brand marketers realize the significance of knowing their customers, but it’s still problematic," said Ashley Johnston, senior vice president of global marketing at Experian Marketing Services.
CDPs remove many of those technical obstacles by using modern methods such as schemaless data stores (that is, a database that doesn't have fixed data structure) as well as machine learning and cloud-based deployment.
Looking Ahead
Raab has already created an Advisory Board of marketing practitioners and sponsor experts to help guide the new institute. Members include Shawn Goodin, marketing CTO, JPMorgan Chase; Mayur Gupta, VP, Growth and Marketing, Spotify; Steve Herdegen, VP, Marketing Operations, Wiley; and Tim Suther, founder, Suther Strategic LLC and former managing director at JPMorgan Chase and CMO of Acxiom.
"There is a lot of information to be shared," Raab said. "This is all part of the digital experience conversation, but this is much more focused on a narrow but huge issue."
