CDPs to Grow 35 Percent Over the Next 5 Years
Research firm MarketsandMarkets expects the global customer data platform market to grow from $3.5 billion in 2021 to $15.3 billion by 2026, at a compound annual growth rate (CAGR) of 34.6 percent.
It credits increasing spending on marketing and advertising, the changing landscape of customer intelligence, and the proliferation of customer channels as key factors driving the adoption of customer data platform solutions and services.
The report defines CDPs as packaged software that creates a unified, persistent customer database accessible to other systems. This customer data originates across different channels to create a particular customer profile. CDP provides some functionality of customer engagement and customer behavior.
Such applications are more important now as the amount of customer data worldwide sees significant growth with consumers increasing their online e-commerce activities and purchases through over-the-top TV platforms, the firm said further.
MarketsandMarkets segments the CDP market into solutions and services, and said the services portion is likely to see the most growth. "Services play a vital role in the functioning of customer data platforms as well as ensure faster and smoother implementation that maximizes the value of the enterprise investments," the report said.
Most CDP vendors provide training and ongoing support and maintenance services, including troubleshooting, upgrades, problem-solving, emergency response management, software maintenance, proactive services, and technical support, the report noted.
As an offshoot of the CDP growth, MarketsandMarkets found that artificial intelligence-powered predictive analytics are more accessible, more applicable, and more powerful than ever before. Predictive customer analytics backed by real data in the CDP, can provide the closest possible answer to desired questions, helping marketers decide how much money, and energy should be invested into each customer segment. Further analyzing the customer journey via decision trees can help marketers visualize the process, providing useful insights between customers who purchased a second time and those who did not, unlocking access to improved workflows.
Together with CDPs, predictive analytics uses attributes found in customer profiles and analyzes recent events to assign the probability of the next event.
"CDPs enable companies to see campaign results in real time so they can observe data as it moves down each stage of the marketing funnel. In terms of long-term strategies, predictive analytics can assist in discovering the most loyal customers through the customer lifetime value calculation. Therefore, CDP provides the backbone to create successful predictive analysis, a unified view of customers, cross-departmental access to data, and real-time results," the report concluded.
MarketsandMarkets expects to see higher adoption of CDPs by larger enterprises, due mostly to greater cloud availability, affordability, and acceptance of emerging technologies.
Among verticals, MarketsandMarkets expects the travel and hospitality vertical to witness the highest growth. The financial services and insurance verticals, meanwhile, are expected to have the largest market share, whcih the firm saysl can be attributed to the increasing regulatory scrutiny, improved customer satisfaction, and other benefits, such as risk management and tailored solutions.
Among the prominent players offering CDPs are Oracle, SAP, Adobe, Salesforce, Microsoft, SAS Institute, and Teradata, according to the report.
The latest predictions, though, marka s teady increase from last year. In its 2021 report, MarketsandMarkets valued the worldwide customer data platforms market at $2.4 billion in 2020 and predicted that it would reach $10.3 billion by 2025, growing at a compound annual rate of 34 percent.