Customer Data Platforms Emerge as Marketing’s Latest Holy Grail

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“When you think about the problem of fragmented information, the focus typically starts in the marketing department. However, a CDP solution involves the company’s computer infrastructure, so at some point, you need to bring in the information technology team,” adds James McDermott, cofounder and CEO of Lytics, another CDP provider.

As companies move toward CDP adoption, marketing tends to drive the initial interest, and IT becomes involved as the enterprise looks at issues like data governance, privacy, compliance, and enterprise system architecture. New titles, such as marketing technology specialist and marketing operations analyst, are emerging for individuals whose responsibilities cover both areas.

Businesses are also creating positions revolving around terms such as digital transformation and business disruption. “The notion today is that companies need to constantly change,” RedPoint Global’s Zisk points out. “If they don’t, their competitors will and then eat their lunch.”


Who signs off is another important consideration because CDPs typically cost lots of money. “CDP pricing is everywhere, like the Wild West,” Bloom states. “We see it starting in the low tens of thousands of dollars and going up to six figures and even seven figures.”

Pricing today often depends on a project’s complexity. “Pricing differences center on how many and how deep does the solution need to go,” McDermott explains. “A mid-market corporation can spend $40,000 to $50,000 to build a CDP with a single customer view and run it for a straightforward campaign. A top-end Fortune 500 brand can spend a million or more for a solution that supports a large number of customer views, many profiles, and a number of events.”

Compounding the pricing issue, how the systems are sold has been evolving. Early vendors sold one system that integrated into the marketing stack. Today, CDP suites are emerging, ones that bundle marketing functions with other applications, like CRM, and include sophisticated development and reporting tools that extend the solution’s base capabilities even further.

Industry behemoths are pushing the latter approach. “We have seen vendors like Adobe, Salesforce, and Oracle broaden their product suites to include CDPs,” Bloom says, noting that their solutions likely appeal to companies that already rely on their software to support other business processes.

Once most of these issues have been addressed, companies then need a clear starting point, which can also be a challenge because CDP systems are so flexible. “Organizations do not want to boil the ocean,” Forrester’s Casey warns.

Experts recommend rolling out systems sequentially: starting with simple tasks and adding more complex ones over time. “A company needs to start by determining which aspect of the business the CDP will support,” Raab says. “These might be marketing programs, customer service programs, or sales. Then it needs to assess what has been stopping that department from running successful programs. If a lack of unified, accessible customer data is a problem, then adding a CDP is appropriate.”

And where they go from there is up to them. CDPs are the latest iteration in marketing’s quest for the perfect system, one that finally creates a consistent customer view. Whether this quest will be successful is unclear at the moment, but existing solutions have alluring features that can help companies improve select marketing programs, so additional acceptance is expected in the years to come. 

Paul Korzeniowski is a freelance writer who specializes in technology issues. He has been covering CRM issues for more than two decades, is based in Andover, Mass., and can be reached at paulkorzen@aol.com or on Twitter at @PaulKorzeniowski.

How the CDP Market Took Shape

While elements of the customer data platform market date back decades, the acronym itself is in a fledgling state, emerging in November 2016. The term was coined at the formation of the CDP Institute, founded by David Raab, head of Raab Associates, and 11 vendors. They launched the ad hoc consortium to promote the concept of “a marketer-managed system that creates a persistent, unified customer database that is accessible to other systems”.

The idea has been gaining traction. The group has been adding about 200 to 300 members per month and currently has around 7,500 supporters, according to Raab.

The forum serves a few missions. First, it provides educational materials: documentation, a newsletter, product info, surveys, and evaluation guides. The organization also has developed checklists and frameworks that are housed in its library and available to interested parties. Its primary standard is the RealCDP program, which lists core requirements that any product must meet to be considered a CDP. True CDPs, it says, must be able to ingest any type of data, capture all of the original details, store the data indefinitely, assemble unified customer profiles, and allow any external system to access its data.

The original dozen backers have grown into thousands of supporters, with the potential for further growth. “We believe that CDP as a function will become a permanent fixture in most companies’ technology architecture,” Raab concludes. —Paul Korzeniowski

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