In January of 2023, BlueConic experts, Alex Sarson and William Quinones participated in a panel discussion exploring the Top 5 RFP Trends in CDP evaluation. After combing through scores of RFPs submitted the previous year, they revealed the most common trends, which included use cases driving better results, more brands seeking to integrate their first- and third-party data, named vs. unnamed connections, journey orchestration and personalization, and the incorporation of AI and machine learning.
After sharing their results, Sarson and Quinones made some interesting predictions on what to expect in 2023. Now, let’s look back to see how those predictions fared.
Prediction #1: Data clean rooms for CPG and fashion retailers
The impending demise of third-party cookies has forced marketers to find alternative ways to reach their target audience utilizing first-party data and privacy-compliant tools such as the BlueConic CDP. This shift has also increased interest in second-party data, which is data shared between two parties who have a direct relationship with each other. Sarson predicted data clean rooms would become more prevalent as a mechanism for privacy safe second-party data sharing – especially among consumer-packaged goods and fashion retailers that typically sell their products through intermediaries and therefore lack access to the individual-level behavioral and transactional data they need to better understand and interact with consumers.
A year later, Sarson observes, “There is still a layer of intrigue around data clean rooms and what can be done with them. Considered a ‘nice to have,’ data clean rooms can be beneficial but only if the right use case arises with a partner.” According to Harvard Business Review, 81% of businesses are still reliant upon third-party data. Because of this, many are still focused on creating their own accurate and privacy-compliant first-party data sets and may not be ready to enter the realm of data clean rooms. However, those who are already taking advantage of this technology are gaining valuable insights into which partner-driven campaigns fostered more purchases – information they can use to optimize future campaigns.
Prediction #2: Sacrificing real-time activation for a composable CDP
Last year there was a lot of hype around composable CDPs and reverse ETL solutions. They were presented as a more secure option due to being “zero-copy,” since the data lives in the warehouse and the composable solution sits on top of that. IT teams liked the idea of the data staying put, and marketers were led to believe it’s more secure and cost effective than a pure-play CDP – but Sarson suspected there were some hidden trade-offs, especially as it relates to real-time activation.
It didn’t take long for issues to surface around composable CDPs, chief among them being the loss of real-time activation. Identity resolution happens in .0024 seconds or less – so if you need person-level data for segmentation and activation, composable won’t cut it. Other claims have also been challenged, including the notion that it’s cheaper and somehow more secure. The truth is, composable CDPs requires heavy involvement of your IT department, which can significantly drive up costs. The BlueConic CDP was built for privacy, and our platform ensures business users can properly utilize first-party data with minimum reliance on IT teams.
Prediction #3: Increase in data privacy regulations
When the General Data Protection Regulation (GDPR) went into effect in Europe in May of 2018, it seemed to put the whole world on notice. Companies needed to prioritize the protection of consumer data or face serious legal and potentially hefty financial consequences. In the years since, many countries around the world have adopted and enacted their own legislation to help protect the rights and privacy of their citizens. While the United States has yet to pass a federal law, many states have their own regulations in place and the federal government did come close to passing the American Data Privacy Protection Act (ADPPA) in 2022. Quinones predicted that we would see an increase in data privacy regulations in both the US and beyond, and on this he was correct.
In the United States alone, several new privacy laws went into effect in 2023, including the Washington My Health My Data Act, Florida’s Digital Bill of Rights, and Iowa’s Act Relating to Consumer Data Protection. Across the globe we saw many other privacy regulations enacted, including the Saudi Arabia Personal Data Protection Law and India’s Digital Personal Data Protection Act. We expect this trend to continue, in fact, Gartner predicts that “by 2024, 75% of the global population will have its personal data covered under privacy regulations.” According to Quinones, “A lot of businesses have added data privacy sections to their RFIs and RFPs, as protecting customer data rights in the platform you use to collect and/or store customer data is critical.”
Prediction #4: Emerging use cases with modeling and analytics
The final prediction was that we would see an uptick in questions around modeling and analytics. Quinones astutely predicted that there are lots of use cases yet to be uncovered – a statement that still rings true a year later. As more generative AI tools continue to grow in popularity, it seems everyone is still asking, “how can AI help me?”
Quinones advises, “It’s important to remember that the output you get from AI is only as good as the inputs it was given; both the data it was trained on and the prompt it was asked to solve. A good vendor will be able to describe their AI capabilities and the kind of use cases customers similar to you have implemented, but expect to have conversations down the road about what kinds of data you have available and what kinds of use cases will be impactful for you to solve. At the end of the process, you will want to focus in on a few achievable targets rather than spend too long gazing at the (seemingly) endless possibilities along the AI frontier.”
Overall, Sarson and Quinones made some solid predictions for 2023. To see what they’ve predicted for 2024, watch Unlocking Success in CDP Selection: 2024 RFP Trends.