Marketers Pay the Price for an Undefined CDP Category

November 14, 2018 | By

Whether in the press or research reports, coverage of customer data platforms (CDP) has exploded. But to buyers, the hype has created a problem. With such a rapid growth in attention, the analyses, recommendations – even basic definitions – surrounding the CDP market can seem contradictory and confusing.

There isn’t one, agreed-upon definition of a CDP

Definition 1:

The CDP institute was the first to define a CDP back in 2016. Despite the nascent state of this market, they’ve already changed the original definition. They’ve 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
  • IT isn’t involved

But in our opinion, broadening the definition makes it harder for CDP 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.”

Definition 2:

Gartner was the second to come out with definition of a CDP. It closely aligned with the Institute’s original definition. Gartner 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, CDPs solve a marketer-specific need and argue it’s “worth looking at” when your organization:

  • Has a trove of customer data, names and contact information, purchase history and cross-device logins
  • Wants to model and activate that data through personalized multichannel experiences
  • Is not interested in or already has a DMP for third-party data integration and programmatic media
  • Has multiple point execution tools that are not easily integrated
  • Wants more (marketer) control than a CRM system provides

Generally speaking, these are great starting points for CDP use cases and Gartner’s body of work on CDPs does the most to create both boundaries and guidance for prospective buyers. That said, their market guide still lists twenty-six vendors and doesn’t distinguish between CDPs types or important capabilities for particular use cases.

Definition 3:

In a recent blog post and report, Forrester notably drew different conclusions about CDPs, 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 sense that CDPs are a work in progress. It also seems to us that:

  • Without a clear definition of what is and what isn’t a CDP, the category is almost too broad to evaluate. Until there are clear definitions, there is not “one-thing” all these CDPs solve for. Many CDPs are saying they are a CDP because they have some functionality of a CDP.
  • Much of the functionality of marketing technology solutions goes un-tapped is because it’s buried behind an outdated or incredibly complex UI. CDPs – ones built for marketers as the original definition states – are meant to make data accessible to use.
  • 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.
  • 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 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 CDPs who are more complimentary than competitive.

Marketers aren’t getting help choosing a CDP   

CDPs are a unique category. Many of the features have existed in other solutions but hadn’t previously been brought together to solve for this particular problem: 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 a new technology.

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 which teams I need buy in from in order to be successful and make the investment in a CDP worth it?
  • What’s the playbook to make sure we’re ready to really take advantage of the CDP once we buy it?
  • Why is it worth the work to get the CDP fully up and running?
  • What will it look like when I have access to the 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?

Use a framework to understand your use cases and know the right questions to ask

While some vendors will focus on almost exclusively on identity resolution, others will focus on partnerships that allow you to use that data to change the customer experience. BlueConic’s model for this is “collect, segment, and activate.” We unify data into profiles to create a single view of the customer, enable you to segment that data, then send those segments to other channels (such as Facebook or GoogleAds) to drive better customer experiences. As with any technology, certain vendors will be a better fit for your needs depending on their strengths. The point is, starting with your use cases helps you narrow down the vendors for your short list.

Now that we’ve thrown a lot of information at you, here is a framework to help you wade through all the noise. There is a massive gap between hype and reality and we believe a solid data strategy is where you should start. This framework, called “Five Success Factors for Implementation of DMPs and CDPs,” is great for aligning all aspects of a marketing tech purchase.

If you believe in choosing a CDP based on your specific use cases, goals, and needs, we created a Proficiency Framework that offers a similar maturity model based on interviews with dozens of brands that have implemented a CDP. Depending on your use case for a CDP, you can build a roadmap to get to where you are going.

Our CDP Proficiency Framework buckets buyers into Experimenters, Accelerators, and Visionaries relative to their appetite and aptitude for different CDP use cases will help you determine the short list of requirements for a vendor.

For more information, check out Gartner’s market guide and our proficiency assessment ebook. 

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