CDP Definition: What is a Customer Data Platform?

CDP|7 Minute Read

CDP Definition: What is a Customer Data Platform?

Looking for a go-to agreed-upon CDP definition from industry experts — the answer to the still-popular question: “What is a customer data platform (CDP)?”

Spoiler alert: You won’t find one, uniform CDP definition around or a clear-cut answer that explains exactly what the increasingly used solution is and does.

Whether in the press or research reports, coverage of the platform has exploded.

But to the prospective buyer who knows they want a persistent, unified customer database, but isn’t sure a CDP is right for them, the hype has created a problem.

The CDP definition problem

With such a rapid growth in attention, the analyses, the recommendations, even basic definitions surrounding the CDP market can seem contradictory and confusing.

Let’s look a bit closer at a few of the most commonly cited CDP definitions and answers to that what-is-a-customer-data-platform question from authorities on the solution.

CDP definition #1: CDP Institute

The CDP Institute was the first to define the platform back in 2016.

Despite the nascent state of this market, the group has already changed its original CDP definition.

Specifically, the it dropped “marketer-managed” in favor of the broader “packaged system” because, according to David Raab, founder of the CDP Institute, it “relates more closely … to the prebuild components and configurability that give CDP its advantages over custom development.”

This change in definition is rooted in the common misperception that marketer-managed means CDPs are only for marketers when data should be shared throughout the organization and IT isn’t involved.

In our opinion, though, broadening the CDP definition makes it harder for potential buyers to evaluate, select, and implement the right tool for them.

A marketer-managed system can still benefit the entire organization. The process of involving IT doesn’t stop a marketer from using data in real time.

As one marketing technologist recently put it to us, “We need to understand what the end goal looks like and what it means for the marketers to have access to the data rather than current alternatives.”

cdp definition

CDP definition #2: Gartner

In 2017, Gartner came out with its distinct CDP definition of a CDP that closely aligned with the CDP Institute’s original definition.

The Gartner CDP analysis defined it as “an integrated customer database managed by marketers that unifies a company’s customer data from online and offline channels.”

According to Gartner, the customer data platform solves a marketer-specific need. The firm argues it’s “worth looking at” for those organizations that:

  • Have a trove of customer data, names, contact info, purchase history, and cross-device logins
  • Want to model and activate that customer data through personalized, multichannel experiences
  • Aren’t interested in or already hav a data management platform (DMP) for third-party data integration
  • Have multiple-point execution tools that are not easily integrated
  • Want more control than a CRM system provides (i.e., a database that is accessible)

Generally speaking, these are great starting points for CDP use cases, and Gartner’s body of work on the platforms does the most to create both boundaries and guidance for prospective buyers.

With that said, Gartner’s CDP market guide still lists 26 CDP vendors and doesn’t distinguish between different types or important capabilities for particular use cases.

CDP definition #3: Forrester

In the Forrester CDP analysis, the firm drew notably different conclusions about the platforms, concluding that:

“CDPs are still a work in progress. On average, CDPs lack the critical capabilities needed to adequately help marketers: Their identity resolution capabilities are nascent; their functionality is often less sophisticated than existing tools in marketers’ tech stacks; and CDP users report having to do more legwork than expected to stand up their implementations.”

We believe, as a new category of technology, it makes complete sense that CDPs are a work in progress. It also seems to us that:

  1. Without a clear CDP definition, the category is almost too broad to evaluate. Until there are clearer definitions, there is not “one thing” all these CDPs solve for. Many martech platforms say they’re a CDP because they have some functionality of a CDP (e.g., some ability to track customer journeys and collect data from other data sources).
  2. Much of the functionality of marketing technology solutions goes un-tapped is because it’s buried behind an outdated or incredibly complex user interface. The best CDPs — ones built for marketers, as the original definition states — are meant to make data accessible to use, provide a single customer view (that is, CDPs that creates persistent, unified customer profiles).
  3. B2C marketers should start with a comprehensive data management strategy. In fact, we believe that successfully implementing a CDP depends on having that kind of strategy in place in order to enumerate and prioritize your use cases that will then be the basis of selecting the right CDP for your organization.
  4. Marketers often have to do more legwork than expected in standing up their CDP, but the “why” behind this matters a lot. For example, if IT promised you a feed of transactional data that, upon importing, turned out to have a bunch of issues in it, the CDP did indeed reveal that issue which can be a blocker to standing up a use case, but it’s more a reflection of the state of data management than a buyer’s mistake or a CDP failing.

As you can see, the confusion around CDPs isn’t limited to buyers.

Analyst firms haven’t agreed on a single CDP definition, and, even within analyst firms, there are varying predictions for how valuable a CDP will be.

Without a clear definition of what is and isn’t a CDP, we get long lists of “CDPs” when, arguably, there are many that are more complimentary than competitive (somewhat accessible to other systems, but not fully integrated like legit CDPs).

Problem: Marketers not getting CDP guidance they need

The CDP is in a unique category of its very own. Many of its features have existed (and do exist) in other solutions, but haven’t previously been brought together to solve for this particular problem:

  • The need for data unification and activation by marketers.

In other words, the CDP provides a whole that is greater than the sum of its parts.

But marketers can’t create a short list for an RFP of CDPs. They don’t have a guide to help them distinguish between types of CDPs or understand how each would approach solutions to their challenges.

Why you need a CDP should be fundamental to choosing one for your business.

Marketers have experience with systems like CRMs, ESPs, and DMPs for the better part of a decade. With that comes an underlying assumption that CDPs handle data in similar ways to those systems.

For example, knowing how an ESP works, you might assume segmentation means a static list. Then, you might not ask about real-time segmentation as part of your evaluation of a CDP.

There are so many critical questions that are keeping prospective buyers up at night, such as:

  • How do I know who I need buy-in from in order to make the CDP investment worth it?
  • What’s the playbook to ensure we’re ready to take advantage of the CDP once we buy it?
  • Why is it worth the work to get the CDP fully up and running, especially right away?
  • What will it look like when I have access to the customer data a CDP is going to provide?
  • What are the use cases for my CDP so I can choose one that has strengths in that area?

Solution: Using CDP proficiency framework to find best one

While some vendors focus almost exclusively on identity resolution, others focus on partnerships that allow you to use data to change the customer experience and provide better customer service.

BlueConic’s model for this is collect, segment, and activate.

Our platform unifies data into profiles to create a single view of the customer, then enables you to segment that data and send those segments to other channels (such as Facebook or GoogleAds) to drive better CX for your audience.

As with any tech, certain CDP vendors will be a better fit for your needs, depending on their strengths.

The point is this: Start with your use cases so you can narrow down the vendors for your short list. One way you can do this is by using tools like our CDP Proficiency Framework.

You’ll come across myriad CDP definitions in your Googling. What it really boils down to during your CDP research, though, is finding a platform that fits your unique data needs.

customer data platform business case

See what BlueConic can do for you.

Whether you’re looking for operational efficiencies or improved marketing effectiveness through data activation, our customer data platform can help.