What is a Customer Data Platform?
With so many data tools and platforms available today, it’s often hard to understand what each does, and more importantly, which data tools and platforms marketers would see value from in their MarTech ecosystem.
After all, you want to invest in a tech stack that solves your omnichannel challenges, whether you want to align fragmented data and collapsed silos, or enhance your ability to understand and manage all your customer data for a clear, single customer view. You also want to keep it simple!
So, what is a CDP (customer data platform) and can it, alone, solve these data challenges?
This is where many marketers may be confused, as there is no single definition of a CDP! Even leading organisations provide slightly varied definitions:
“A customer data platform is a marketing system that unifies a company’s customer data from marketing and other channels to enable customer modelling, and optimise the timing and targeting of messages and offers.” – Gartner
“A CDP centralises customer data from multiple sources and makes it available to systems of insight and engagement.” – Forrester
“A customer data platform is packaged software that creates a persistent, unified customer database that is accessible to other systems.” – CDP Institute
A CDP is a marketing software that works to connect data from multiple sources, creating a unified customer database that other marketing systems can then use.
- 1 “Market Guide for Customer Data Platforms for Marketing,” Gartner, 2018
- 2 “For B2C Marketers, Customer Data Platforms Overpromise And Underdeliver,” Forrester, Oct 26, 2018
- 3 “Customer Data Platform Basics”, Customer Data Platform Institute, 2017
2 / The Difference Between a Customer Data Platform and a Data Management Platform
A CDP can help to connect an organisation’s customer data into a single data ecosystem.
But marketers may need more than a CDP to achieve their omnichannel marketing goals and create an aligned data landscape.
The CDP Challenge
With varied definitions and more than 100+ vendors claiming to offer a CDP, confusion not only exists about what constitutes a CDP but also the breadth and depth of its capabilities. No two CDPs are the same!
Features, software maturity, and capabilities (such as segmentation) will vary from vendor to vendor. Working out which CDP, if any, would enhance your existing martech ecosystem is a complex challenge and there may not be one CDP that solves all your data challenges.
This is where other tools in your martech ecosystem (and Professional Services partners like Acxiom, who can help you navigate the complex world of martech) may come into play.
There is often confusion about the difference between a CDP and a data management platform (DMP). Both tools can add an aspect of centralisation to your data ecosystem, and there is often an overlap between each. But while a CDP focuses on unifying a wider set of customer data into a single database (such as offline data and PII such as email addresses), building audience segments, and activating the data across digital advertising and other channels (direct mail, email, website personalisation, mobile marketing, etc.), a DMP is more audience-focused, with a focus on digital advertising use cases (digital audience data, cookies, online behaviour data, look-alike audiences); designed to help marketers collate, manage, and house first and third-party data to create target audiences and use that insight to launch, analyse, and optimise campaigns.
Do I need a CDP or a DMP?
Essentially, a CDP helps centralise your customer data into a single customer database, while a DMP manages and aggregates digital audience data (cookies, online behavioural data, look-alike audiences, etc.) to enable audience segmentation, analysis, and optimisation.
Of course, there are other platforms that can be combined with a CDP, and a DMP, that can lead to improved results; for example, you may need to incorporate more sophisticated identity resolution within your CDP and DMP.
3 / Why Use a CDP?
If you’re considering a CDP, there are a number of benefits. Though the CDP market is still maturing, most CDP vendors say their solutions help marketers:
- Address the need for a single customer view across marketing channels; enabling marketers to manage customer views and create universal, persistent consumer views by resolving identity across different channels.
- Collect and integrate customer data from digital and offline systems – connecting with source systems, such as marketing applications and CRM.
- Create segments for real-time marketing applications.
- Expose data to other systems – including customer analytics and customer engagement platforms.
At first glance, because these benefits are helping achieve an integrated, centralised data platform, many marketers who are looking for an omnichannel solution believe a CDP is the right choice to address their key requirements.
However, because the scope of capability varies from vendor to vendor, a CDP may still require additional support from other technologies and also professional services to properly use and integrate into a wider marketing business process.
“Wait. Isn’t there one data solution I can use to do everything?”
Data marketers need a wide range of varying capabilities. Depending on your organisation’s unique situation, data ecosystem, existing martech stack, and specific requirements, you may need a range of technologies to achieve your goals—not just adding a CDP and hoping.
Is there a different approach I should be taking?
The answer to this question lies in marketers properly assessing their target use cases, the capabilities needed to address them, and a sustainable data strategy to guide their pursuit of a solution. Acxiom provides both the experience to assess and establish a sustainable data strategy, and a framework to deliver data-driven solutions that can solve enterprise-wide people-based marketing requirements.
Introducing Acxiom’s 5 E’s Framework
With the CDP institute tracking c.140 CDPs, Acxiom recognises that the CDP landscape is complex – and with a heritage in building custom data solutions for years – is uniquely able to provide exceptional insight.
Working to inform, advise, and make recommendations to clients as they navigate through the complex martech landscape Acxiom follows a professional services framework – ‘the 5 E’s’ – designed to help clients select, implement, and get value at speed from given CDPs.
These 5 E’s are:
- Evaluate – Validating the current and required capabilities from an audience, investment, technology, people, and skills perspective.
- Experience – Ensuring the solution meets all business requirements for delivering the client’s goals.
- Enable – Designing the right end-to-end solution to meet business objectives in prioritised phases.
- Engage – Developing the required marketing communications strategy and processes based on the power of the technology platform.
- Embed – Supporting internal teams to realise the full potential of the new platform.
4 / Customer Data Platform Common Capabilities
Yet as the scope of capability varies widely between vendors, standard features for CDPs are fluid and evolving – and inconsistent features create confusion!
So why the inconsistency? One explanation is that a vendor has previously focussed on other related software categories, such as marketing automation, analytics, tag management, or campaign management – and is evolving their positioning and technology with the rise of the CDP category.
In a changeable and flexible space that is still maturing, this means support for key capabilities can vary greatly between vendors – here, partnering with an experienced data expert can ensure simpler navigation of the evolving martech landscape.
So what common capabilities, features, or support can be expected from a vendor who identifies their solution as a CDP?
Most CDP solutions are commonly able to support:
- Collection and integration of customer data from digital and offline systems. Most CDP solutions support standard connections for source systems such as marketing applications and CRMs – a requirement to support data integration.
- Management of customer profiles. A CDP solution should be able to create universal, persistent consumer profiles, using identity resolution to create accurate profiles of individual entities, customers, visitors or prospects across devices and channels.
- Segment creation for real-time marketing applications. A CDP should be able to create segments for real-time marketing applications, enabling marketers to make segment data immediately (often instantly) available for use in other marketing applications – to drive relevant, real-time customer messaging and experiences.
- Data availability with other systems. CDPs enable marketers to expose data to other systems – making that data available to places such as customer analytics, customer engagement platforms and more.
- Compliance with governance and privacy legislation. Compliance with legislation such as the EU’s GDPR (General Data Protection Regulation), alongside maintaining a transparent, responsible, and secure approach to data must always be a priority for any data solution – and for anyone working with data.
As we’ve explored, the CDP landscape can be a confusing place. And while a quality CDP solution should support the points above, the scope of capability may still vary between vendors. As such a CDP investment may still require additional support from other technologies and professional services, depending on the range of capabilities required.
Because of this and because every organisation has a unique situation, martech stack, data ecosystem, and more, it’s important to evaluate whether a CDP solution will really suit current and future needs before investing.
5 / Evaluating Whether a CDP Fits Your Needs
If a CDP is a potential fit for your target use case or requirements, where should you start in your search for a quality vendor?
There are a number of considerations to take into account when evaluating a list of customer data platform vendors, such as heritage, experience, flexibility, scalability, and scope of integration in the enterprise.
When evaluating a CDP:
- Be sure to step back from the hype to conduct a careful assessment of your organisation’s needs. Is a CDP truly the right solution for your use case, and if so, which CDPs include all the capabilities you need?
- Consider if you have the resources and experience to implement the solution. Do you have the right skill sets? Or will you utilise third-party technology and services? Keep in mind that many organisations struggle to realise the value of a CDP.
- Review your existing marketing technology. Does this support and align with your choice of CDP? How will they be integrated?
- Evaluate if the CDP truly provides a complete and high-quality single view of the customer. There are some areas of functionality required to attain an accurate single view of the customer where many CDPs are still maturing. Consider: can the CDP meet capabilities such as data quality and standardisation, identity resolution and identity management? Or will other additional technologies be required to achieve the desired results?
- Explore what data your CDP can manage. CDPs typically can manage known customer data, including personally identifiable information (PII). However, carefully review if each CDP you are considering manages customer data from all the source systems you need, and provides data governance rules and privacy-compliant processes to ensure the personal data is used correctly. For example, consider if you have requirements to manage sensitive or special category personal data (such as ethnic origin, sexual orientation, health, religious and political affiliation data), comply with strict regulations such as FCRA, HIPAA, PCI, CCPA or GDPR, or limit how the personal data is moved across national/regional borders. You need to ensure any CDP you consider can meet these requirements.
- Make sure you have a data strategy and support in place for optimal use and implementation of your CDP. If you are unclear on whether you have this in place, partner with an experienced service provider who can provide specific work packages, insight and recommendations to support your requirements and goals. For example, are you collecting the right data to be able to act on your plans? Do you have the right consent framework in place so that you can use the data? Do customers trust you enough to share data with you? It’s great you have the technology, but if you don’t have the data to go with it then you’ll struggle to realise your project’s goals.
- Consider measurement. Many CDPs are not designed to support omnichannel analytics and closed-loop measurement use cases. Consider if you have – or require – a solution to achieve this and whether the declared capabilities of a particular CDP can address your requirements.
Marketers must assess and weigh these factors to determine the optimal path forward for addressing the full spectrum of brand needs for unifying and activating data. This is why employing Acxiom’s experience in this space can help you to make the best decisions to meet your business requirements and needs.
6 / Acxiom’s Professional Services
Facing a complex martech landscape, having the right insight, and advice is crucial for marketing leaders looking to maximise their investment.
By choosing a professional services partnership with Acxiom, marketers can gain the confidence and clarity needed when making a CDP decision – one that helps the business achieve its unique goals.
As experienced data leaders, Acxiom provides the foundation to help marketers make the best decisions mapped back to their business requirements; following proven frameworks, leveraging best-of-breed technology and implementing core services designed to generate the best return on investment.