Welcome to the Age of the Customer Data Platform

The Customer Data Platform or “CDP” is quickly becoming a hot topic of conversation in data driven marketing circles, as CDPs successfully carve out a position in the marketing technology stack. With marketers now spending more in customer retention than acquisition by a factor of 2 to 1 (Gartner CMO Survey, 2018) the CDP could prove to be a valuable solution.

However, in an increasingly complex environment, with ever-more overlapping capabilities across data management solutions and a decrease in the relative budget assigned to martech investment (Gartner CMO Survey, 2018), advertisers are forced to consider whether the CDP provides sufficient incremental value over and above already established and licensed technology solutions.

What is a CDP?

In simple terms, a Customer Data Platform is a technology solution that supports collection of first-party data sets from across an advertiser’s owned and operated properties, and provides identity management protocols to resolve these fragmented data sets, informing a persistent, unified customer view. Building on a unified identity, the CDP supports audience curation and segmentation, and data sets can be exported to a wide variety of media and marketing platforms, content systems and CRM solutions, principally via the use of real-time, API-driven data export.

The CDP’s ability to support holistic data collection from within unstructured as well as structured environments, coupled with its capacity to collect and activate data across both the known (CRM and email) and unknown (digital and mobile) consumer universes, provides a strong foundation for first-party data integration, unification, and identity management. Identity sits at the heart of the CDP, and with identity resolution and reconciliation being key functions of the platform, as well as ID translation and pivot, it’s no surprise that advertisers frequently reference these technology platforms as central systems of record.

The ability to synchronise known customers with anonymous users across digital and mobile properties to build a more holistic view of the consumer is the main draw of the solution – and has the potential to deliver on the promise of 360-degree, 1:1 customer relationship. However, it should be noted that to benefit fully from this universal identity management solution requires a deterministic client-driven matching process, and often necessitates an authenticated user action, such as a registration or login, captured on the brand’s website and/or app. This can, for some, be a major limitation in respects to the scale of user profiles that are synchronised at any given time.

Beyond ID management and resolution, the Customer Data Platform also maintains a suite of point solutions, including CRM ingestion and normalisation, tag management, app tracking, audience segmentation, consumer journey analysis, and data transfer. This suite of practical applications is often considered to overlap with existing adtech and martech solutions, however the overall approach, as well as its almost exclusive focus on 1st party data (including PI), the emphasis it places on the single customer view, and the speed and efficiency of data transfer processes and real-time platform connections, creates a clear distinction in the positioning of this technology in comparison to, for instance, a Data Management Platform (DMP).

Is a CDP right for me?

Investing in new technology is always a complex task, and not to be undertaken lightly, particularly in cases when there is a high level of potential overlap with existing capability. Below is a brief guide to the questions that you should ask yourself to determine if the Customer Data Platform is the right solution for you:

Does my brand have a sizeable CRM database, or several?

CDPs are leading solutions in the integration, aggregation, and normalisation of CRM data sets, providing a cognitive ETL layer that can transform fragmented, disordered CRM data sets into well-curated, coherent audience segmentation, facilitating marketing automation and events-triggered nurture campaigns. Without a significant volume of customer records, refreshed and updated on a frequent cadence, the value of the CDP may not be fully realised.

Does my brand have a substantial mobile app user-base?

With identity management at the heart of the CDP, the connection of mobile app environments with digital web and browser environments is key. If you have a strong mobile presence with several mobile apps, or complex mobile commerce platforms, then the CDP may be better placed to support data collection and ID management across those environments. If there is limited presence across mobile app, then data collection mechanisms deployed by DMPs will be sufficient to manage app data ingestion and classification processes.

Do I authenticate users across my owned and operated properties?

With the introduction of the General Data Protection Regulation, more brands and publishers are seeking to verify users and authenticate visitors through registration and login. Authentication events are vital to deterministic identity management, and are the cornerstone to ID resolution via the CDP. If authenticated user actions are low, the opportunities to synchronise IDs across mobile, desktop and CRM may be rare. If you don’t authenticate users, then probabilistic device graphing solutions built within a DMP may be better placed to support ID management and cross-device campaign orchestration.

Does my brand invest in lower-funnel activity, such as retargeting, lead management, and churn-mitigation?

The CDP is not, in the main, a top-of-funnel prospecting tool. The emphasis on 1st party data, as well as the focus on CRM integration and marketing automation means the CDP is better-equipped to manage campaigns towards the bottom of the funnel. If its brand awareness and early consideration, then audience tools within the DMPs, which leverage 2nd and 3rd party data sets more readily via marketplaces, may be better suited to your needs.

Do I activate heavily in social media platforms?

Customer Data Platform Integrations with social media platforms such as Facebook, Instagram, Twitter and Pinterest, via CRM matching keys (email address, telephone number etc.) enable superior activation of 1st party data within these environments. For those that activate heavily within social media platforms using 1st party data, the CDP may prove to be a powerful solution. DMPs can also provide activation into social media platforms, however tend to leverage client-side transactions, or off platform data migration processes.