Three takeaways from the CDP Institute’s “Industry Profile” report

January 18, 2017 | By

This morning, David Raab’s think tank on all things customer data came out with a report on the industry, aptly called “Customer Data Platform Industry to Reach $1 Billion by 2019.” It reaffirms our belief that 2017 is the year of the customer data platform – and adds some additional insight as to why that’s the case. Three things of note from David’s research:

  1. The CDP category is on 🔥. With hundreds of millions in combined revenue and a growth rate of at least 50% per year, Raab estimates that CDPs will represent a $1b market by 2019 (the year CDPs took over the world?) With more than two dozen vendors, thousands of customers, and three-quarters of a billion invested in this space, the market is heating up at a blistering rate – with no sign of stopping.
  1. Capability consolidation is coming, but not yet. One of the surest signs that a technology category has reached the top of the hype cycle, so to speak, is when both demand and supply are at stasis; in other words, what marketers want/use and what vendors provide are aligned and don’t dramatically change. For example, any email vendor worth its salt has to be able to send a certain volume of email to satisfy its customer base; volume isn’t a differentiator anymore. In the CDP category, though, the report makes it clear that “All CDPs assemble customer data and make it accessible,” and then there’s a wide array of capabilities (analytics, orchestration, attribution, and identity resolution) that are all so broad as to be categories in their own right. With further traction will come greater clarity on where the supply and demand converge more narrowly (which will also determine which vendors “win” in this world too).
  1. Origins of the species are diverse. The report (I think rightly) pegs three points of origin for CDPs: tag management, campaign and personalization systems, and customer data systems designed to make data available but have pivoted from being oriented toward IT to the marketer. All three make sense in their own right. It’s worth noting that unlike some brand-new technologies that could be considered revolutionary (essentially net new), CDPs are evolutionary simply because their currency – customer data – has been a topic to tackle going back literally decades and predecessors are rife. We still feel strongly that built-for-purpose is going to carry the day, but it’s logical to see players from any number of areas (and more are jumping in it seems like every day) making a play for this market.

Thanks David for the research!

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