First of all...Why is there a need for a CDP?
In the year 2020, the average adult will own more than six smart devices (Gartner), making cross-device IDs and identity resolution – the ability to consolidate disparate sets of data into an individual profile – a critical need for marketing effectiveness.
We have now entered the era of data-driven, always-on marketing in which marketers need to be both present and relevant ‘in-the-moment,’ the so-called “micro-moments”. Google introduced the term in 2015. The hic et Nunc et ego behaviour that typifies micro-moments is a direct result of the increased use of smartphones. A customer is in a micro-moment when in an instant, he turns to a screen because he needs to learn something, discover something, do something or do nothing.
As Professor Mohan Sawhney of Kellogg School of Management puts it:
“People go online for two purposes only, they either want to save time or waste time. It’s a marketer’s job to be there when the customer is in the moment.”
It’s in these intent-rich moments that preferences emerge and decisions are made. A 2018 study by 451 Research states that within five years, 40% of digital marketing leaders will prioritize intent-driven engagement. This is only possible when marketers embrace technology.
Almost half of the marketing executives say they are responsible for enterprise marketing technologies and nearly one quarter manage their martech platforms independently from IT.. With marketers exercising more control over technology, there is more focus on adopting marketing-centric solutions.
Many marketers continue to work with these glimpses of customer understanding because they struggle with technology or don’t have the means of putting the entire picture together. So how can companies organize around their customers to deliver excellent experiences in today’s data-driven world and streamline the flow of customer data throughout the martech stack? In a survey done by the CDP Institute, this is seen as a major obstacle to marketing success.
The term Customer Data Platform was initially coined by David Raab in 2013 to describe several types of marketing systems that shared the ability to built a unified customer database.
Most of these systems created a database to support an application such as predictive modelling, attribution, website personalization, or campaign management. Over time, many vendors recognized that other applications could also use their database. These vendors added features to allow access by other systems, converting their systems into full Customer Data Platforms or CDP’s. During the same period, several web analytics and tag-management vendors recognized they could modify their data-gathering systems to create a persistent database, creating another form of Customer Data Platform.
By 2016, both sets of vendors had converged to form the CDP industry. The industry has multiplied as marketers recognized the need for unified data and the shortcomings of alternative solutions such as data warehouses, data lakes, CRM, and DMP. Growth in Europe was further boosted by Customer Data Platform features that help companies comply with the General Data Protection Regulation (GDPR).
It has been interpreted in different ways by different vendors and even users. So, let’s start by saying that every company will have a different version and interpretation of what its Customer Data Platform should be and look like, based on the various objectives. While every unique context requires a unique approach, some of them are key and relate to the definition in the following ways:It’s about the individual human being as a customer, not a group of them. The term Customer Data Platform refers to the singular, not the plural. It ’s a marketer-managed system that differentiates from enterprise data warehouses, which are built and managed by IT departments. Customer Data Platform adoption will often start with the marketing department because it focuses on marketing needs: customer, prospect, and product data as a driver of growth. It’s packaged software bought and operated by business users, most often in marketing, with minimal assistance from the corporate IT department or an external vendor. The packaged nature of the system makes it much easier to deploy and change as new needs arise. Some technical skills will still be needed, especially during system set-up and when making changes in data sources.
For marketing departments without the necessary internal resources, most vendors provide those services directly or through partners. Even though most CDPs are designed to be marketing tools, they can also have applications across the enterprise that can provide a valuable assist to the Chief Information Officer (CIO) who views data strategically as something that needs governance and efficient management. Ideally, marketing and IT come together to adopt, implement, and ensure the ongoing effectiveness of a CDP.