Gartner’s latest Hype Cycle for Digital Marketing and Advertising placed Customer Data Platforms (CDPs) on a rollercoaster to the summit of the "Peak of Inflated Expectations."
Soon, therefore, CDPs will begin their slump into the "Trough of Disillusionment," currently occupied by Content Marketing, Data Management Platforms and Responsive Design.
To this, I, as president of a CDP vendor, say — this is great news.
A Customer Data Platform Reality Check
As the many marketers struggling to unify and manage their data across marketing channels will know, Customer Data Platforms are heralded as the answer to all of their fragmented data problems.
Promises like these are unsustainable. It will do many of us good if CDPs start heading back down to reality.
For those of you who managed to miss the CDP Hype Train, Customer Data Platforms consist of four core features: To be built for and controlled by marketers; to persistently unify disparate customer data channels with a single customer view process; and make this unified data visible to external marketing systems.
Creating a single view of each customer has topped marketers' wish lists for a long time. So the rapid growth in excitement surrounding CDPs comes as no surprise. What business doesn’t want to make better use of its first-party data to more accurately segment their customers and drive more personalized customer experiences?
Yet the truth is the CDP market is immature. And a curiously assorted collection of vendors from tag management, multichannel marketing and many other corners of the MarTech world are all claiming to be part of the CDP space. Who can blame them? Who wouldn't want to be part of a market calculated to generate over $1 billion total revenue by 2019?
Clearing the Muddy MarTech Waters
For many marketers (and many marketing technology vendors), the Customer Data Platform landscape can feel like the Wild West. With so many overlaps between CDPs and similar data management technologies, almost anyone can claim to be a Customer Data Platform.
Only the most clued-up data marketer can tell a Journey Orchestration Engine (JOE) from a Data Management Platform (DMP), or what makes a CDP different from a Data Warehouse. Or a Tag Management System. Or a Marketing Automation Platform (MAP). Some CDPs qualify as a CDP and a MAP.
With this in mind, I’m not shocked to see CDPs — only six months ago rocketing up Gartner’s "Innovation Trigger" — begin their inevitable descent into disillusionment. The CDP industry needs this.
Customer Data Platform Institute founder and industry analyst David Raab has been championing the technology for years. He suggests grouping CDP vendors into a subset — or multiple subsets — based on their features could help clear the muddy waters.
Beyond the four key CDP components (which are a given,) these subsets could act as a ‘checklist’ for marketers hoping to find a CDP that best suits their needs. For example a CDP with predictive modeling, can merge online and offline data, and so on.
But this can only happen once the hype starts to die down, and market expectations become more realistic. Those vendors just along for the ride will move on to the next buzzworthy MarTech acronym in time, while the more ‘no nonsense’ vendors will be able to demonstrate the true value of their products, without being obscured by the claims of others.
Not only that, but as the market matures, vendors will start to align by offering the solutions their market needs most, while other overlapping technologies will start to converge.
After the Trough of Disillusionment ...
For those who have already invested in a Customer Data Platform, congratulations. You have successfully negotiated the smoke and mirrors to find the truth. You not only know much more about your customers than ever, you can harness this data to deliver consistent, targeted, personalized experiences across all your marketing channels.
For those who haven’t, know that the Trough of Disillusionment leads to the Slope of Enlightenment, so look into how a CDP can really work for you before everyone else has seen the light.