Customer Data Platforms (CDP) will reach $1 billion by 2019, according to the marketing technology consultancy that coined the category three years ago.

Researchers at Swarthmore, Pa.-based Raab Associates made the prediction after analyzing 27 CDP vendors that collectively generated more than $300 million in revenue last year. 

The finding is part of a new Customer Data Platform Industry Profile report, which will be released tomorrow by the Customer Data Platform Institute. The institute is a vendor-driven trade association established to educate marketers and marketing technologists about CDPs created late last year.

CDPs allow marketers to build unified customer databases that can be accessed by other systems. 

Marketers gain better control over data than in traditional enterprise data warehouses, which often lack real-time access for marketers, analytics, reporting and messaging capabilities, according to David Raab, principal for Raab & Associates and CEO of the Customer Data Platform Institute.

"I had no idea the number was going to be that big," Raab said of the vendors' revenue reports. 

"Most of these vendors may have started out as tag managers or in data integration. But they are really building a database and are really doing what CDPs do. So it’s very real that it’s become a much larger industry."

Measuring the Value of CDPs

Calling the report a the first of its kind, Raab said his team combed public and private data, including confidential information provided by the vendors, to measure the value of CDPs. They found:

  • Total funding for CDP vendors exceeds $700 million
  • CDPs are deployed at 2,500 or more companies
  • Average price per installation is close to $100,000 per year

The vendors cited in the report are: Agilone, Aginity, Ascent360, BlueConic, BlueVenn, Boxever, Datalicious, Datorama, Ensighten, Eulerian Technologies, Fjord Technologies/Tag Commander, Fospha/iJento,, Lytics, mParticle, NextUser, NGDATA, Omniata,RedPoint Global, Reltio, Segment, Signal, Tagga,Tealium, Treasure Data, Umbel and Yeti Data.

The numbers confirm that many organizations have already recognized the value of these systems and adopted them, Raab said. "There’s no doubt that the industry’s momentum will grow as the benefits of CDPs become more widely understood,” he added.

Gartner's Take on CDPs

Gartner introduced CDPs into its Hype Cycle for Digital Marketing and Advertising report in July. The analyst firm defines CDPs as integrated customer databases managed by marketers that unify a company’s customer data from marketing, sales and service channels to enable customer modeling and drive customer experience.

David Raab
David Raab

CDPs tackle an "acute need for modern marketers," Gartner maintains: a complete view of the customer, beyond the acquisition stage. It's a bridge between traditional marketing database or post-sales CRM system and multichannel campaign management execution engines.

Raab's researchers said CDP vendors provide a mix of identity resolution (linking different systems that refer to same customer), analytics (typically fed into marketing automation systems), orchestration (messaging) and attribution (measuring campaign impact).

Scott Brinker, who produces the MarTech Supergraphic that includes the thousands of MarTech providers on his Chief Marketing Technologist Blog, told CMSWire he's got a section for Customer Data Platforms. 

Learning Opportunities

"To me," Brinker said, "CDPs are the data layer for a digital marketing hub. That's enormously helpful for coordinating multiple technologies across a best-of-breed stack. And pretty much every company of any real scale has a best-of-breed stack."

Brinker MarTech supergraphic
Scott Brinker's MarTech Supergraphic includes a section for Customer Data Platforms under his Data category.

How are CDPs Different?

We've all heard for years now that the "single view of the customer," or a "360-degree" view is the holy grail for digital marketers. Data management platforms (DMPs) such as $5.85 billion Adobe's and $37 billion Oracle's have promised this kind of data assembly for marketers.

So what is new about Raab's CDPs? 

"In the past, marketers weren't able to build their own databases, and that's the key thing going on here," Raab told CMSWire. 

"It was too hard technically. The software is now smarter and there are a lot of (Software-as-a-Service) data sources designed to be more accessible. There's not as much custom integration. So it’s possible for a CDP vendor to build two dozen connectors to ingest data."

CDPs work with both anonymous and known individuals, storing “personally identifiable information” such as names, postal addresses, email addresses and phone numbers, Raab blogged on one of the CDP vendors' sites (BlueConic) in June of 2016.

"DMPs work with almost exclusively with anonymous entities such as cookies, devices and IP addresses," Raab wrote. "Indeed, anonymity is essential to the DMP’s role as a way to exchange information about audiences without violating personal privacy. What’s changed is that CDPs are integrating more often with advertising systems, and thus storing more DMP-type information such as cookie IDs with audience tags."

Not Enterprise Data Warehouses

In its report, Raab's CDP Institute said Customer Data Platforms can be distinguished from:

  • Enterprise data warehouses, data marts, data lakes, etc., which are built and managed by corporate IT departments
  • Data management platforms, which primarily store anonymous cookie data for display ads
  • Integration hubs, which move data between systems but do not store it persistently
  • Personalization, predictive modeling, attribution, and other systems that assemble a customer database but do not allow external access 

These systems compete with CDPs to help marketers unify customer data. CDPs also compete with data quality and management tools used by IT departments to build enterprise data warehouses and with marketing agencies that build and maintain databases for their clients, the report found.