A marketer’s guide to CDPs (behind the hype edition)
AdExchanger's Allison Schiff spoke to mParticle's CEO & Co-founder, Michael Katz, in this updated marketer's guide to CDPs where mParticle is noted as a significant independent company in the rapidly expanding category.
Fragmented data is a real and lingering problem for marketers. The question is whether a customer data platform (CDP) is the solution marketers seek and, if so, whether every marketer actually needs one.
The TL;DR on CDPs is that they unify, or at least aim to unify, a marketer’s first-party data, including online and offline data, which usually sits across multiple systems, in order to create persistent profiles – CDP vendors like to call them “golden records” – that can then be activated across channels, and not just for advertising use cases.
But last year's buzz around customer data platforms is giving way to skepticism, and that’s only natural.
At the same time, the marketing clouds are keeping the buzz alive with plans to launch CDPs of their own. Even Salesforce intends to try and get in the game.
The CDP space is crowded and only getting more so. That makes it hard for marketers to figure out who does what and who’s for real.
The fact is, there are a heck of a lot of companies out there that identify as a CDP, but they all do slightly different things, and marketers have a tough time distinguishing between vendors, said Michael Harrison, managing director at Winterberry Group, which recently conducted a study that found of the more than 100 companies that describe themselves as a CDP, fewer than 20 can be classified as a “true” customer data platform.
True CDPs belong in the data layer, Harrison said. Everything else is an application with CDP-like functionality, and that’s where brands can get a bit muddled.
And some CDP vendors, a number of which pivoted into the space to try and tap into growing buyer interest, are quite comfortable taking advantage of that confusion. “More than one of the CDPs we spoke with for our study told us they knew they were not really a CDP, they just needed to call themselves a CDP to get on the RFP,” Harrison said.
That sort of thing doesn’t sit well with marketers, some of whom are dubious to begin with.
Kumar Subramanyam, global head of marketing and data sciences at HP, isn’t convinced.
“I have a hard time finding a differentiation point when I talk to vendors,” Subramanyam said. “They keep knocking on our door to talk about CDPs and I always ask, ‘What is the value you give me that I don’t currently have?’ And I haven’t been able to find that thing yet that will allow me to turn around and say, ‘Okay, let’s really evaluate this.’”
What you seek
So, how can a marketer make sense of all the noise?
They should start by asking themselves what use cases they want a CDP to help with, said Omer Artun, CEO of AgilOne, an early entrant into the CDP space.
“Sometimes marketers are out there hunting for features, you can see that from what they ask in the RFP,” Artun said. “My advice would be to start by having marketers state their needs and priorities.”
In a lot of cases, the problems that marketers are looking to solve can actually be taken care of by an existing data partner, identity resolution vendor or by just being smarter about how they use their marketing cloud.
“One of the main things I tell people to do is avoid using a CDP as a Band-Aid or duct tape,” said Joe Stanhope, a VP and principal analyst at Forrester.
Weigh the use cases
But the CDP use cases are real, from site personalization and identity resolution to omnichannel orchestration and real-time decisioning.
“Anyone without a CDP has numerous instances of customer data,” said Michael Katz, CEO of mParticle. “Every single use case for a CDP is highly dependent on the state of data in an organization and getting to the point of having a single customer view.”
To date, marketers have been very channel specific, with separate teams and tech for email, ecommerce, direct mail and in store, but without a way to pull all of the resulting data together.
Currently, the tastiest fruit is actually the lowest hanging, such as being able to run a thoughtful retargeting program that doesn’t stalk people with messaging for items they just bought, which is annoying, wasteful and creepy in equal measures.
“It often takes a CDP to connect an audience through the DMP and to the commerce system,” said David Raab, founder of the CDP Institute, and coiner of the term “CDP” in 2013. “That’s not necessarily super sexy, but it’s super important, and a CDP provides the plumbing to make it possible.”
The clouds are gathering
Many enterprise clouds are getting into the CDP game after spending the last couple of years being either silent or dismissive on the subject of customer data platforms.
Oracle was earliest to market with an actual CDP-like product, CX Unity, as part of its Customer Experience Cloud in October 2018. In March of this year, Adobe debuted its Experience Platform, which includes a CDP, and Salesforce announced its plan (to announce its plan) for a CDP rollout in June.
Although Salesforce Marketing Cloud CEO Bob Stutz referred to the standalone CDP as “a passing fad” last year, customers have been asking for the sort of functionality that CDPs promise, “and we have been listening to them,” said Marty Kihn, SVP of product management for Salesforce Marketing Cloud.
From the CDP vendor perspective, Salesforce’s announcement is a concession that customer data platforms are far from a passing fad, and that a DMP combined with an email service provider tacked onto a CRM system “does not, has not and cannot equal a CDP,” said Cory Munchbach, VP of strategy at CDP BlueConic and a former Forrester analyst.
“The same is true for Adobe Marketing Cloud and Oracle Marketing Cloud and all the other marketing clouds that have hustled this idea that a bunch of solutions jammed together with services is a CDP – and are now trying to build their own,” Munchbach said.
Even so, the marketing clouds have a lot of weight to toss around and they could use it to crush the majority of the independent CDP market.
The marketing clouds are increasingly invested in building up their identity resolution, analytics and data management offerings, in part because of the high and growing profile of CDPs – yet at the same time that’s also “the largest existential threat to the CDP industry,” said Forrester’s Stanhope.
“If you’re a CDP, what do you do when Oracle, Adobe and Salesforce are able to do what you do as well as you?” he said.
Sounds like curtains for the indie CDP. Not so fast, said Brian Andersen, a partner at investment bank LUMA Partners, who’s admittedly quite bullish on the CDP market.
“CDPs are focused on being an open ecosystem for all providers,” Andersen said. “That makes them a strong contender for building a big business over the long term – and not one that’s coupled with the marketing clouds, which inherently are just looking to make their own stuff work better.”
Meet the vendors
Here’s a rundown on some of the big indie names in the market. [And click here for info on ActionIQ, AgilOne, Lytics, mParticle, RedPoint Global, Segment and SessionM.]
A newer entrant onto the CDP scene, Amperity was founded in 2016 and came out of stealth last year with a focus on using machine learning to match customer records across data sources which can then be sent to different systems for activation.
“We’re trying to be the connective tissue between the data you have and the places where you want to operationalize it,” said CEO Kabir Shahani.
But ease of use is as important as the data science, and Amperity is investing equally in both. “We want to make it as easy as possible to dump data in and then get it out in a format that other tools can understand,” Shahani said.
Amperity counts Brooks, Gap, Moët Hennessey and TGI Fridays among its clients.
BlueConic has been telling the same story about its value proposition since 2010, a rarity in the CDP space, which is populated by a lot of newbies and players that have pivoted.
The company, whose clients include T-Mobile, Hearst Newspapers, ING and Atlantis Resorts, allows marketers to collect and manage all of their different user profiles tied to a persistent identifier.
“We emphasize cross-channel data at the customer level – meaning every piece of data in the system, so that the customer becomes the central object,” Munchbach said.
Although some CDPs sell into the IT department, BlueConic has always been focused on what the marketer needs, which is something more than just a data repository or “glorified database,” she said.
“Marketers don’t simply want all of their data in one place, they want it there for a reason, so they can do things like create cross-functional data segments and have the ability to distribute those segments to the systems they care about.”
Bluecore isn’t a standalone CDP, but it does provide CDP-like functionality to a roster of primarily commerce and retail clients, including CVS, Express, Sephora, Perry Ellis and Newegg.
Founded in 2013, the company identifies as a personalization platform that helps marketers drive better customer lifetime value by unifying and processing retail data, like transactions, in-store data, loyalty data and product data.
If someone is browsing a site regularly and continually looks at the same few categories again and again, Bluecore can recognize what that person is interested in, at what price, whether he or she has purchased anything in the past and if there’s a cross-selling opportunity there.
“We look at hundreds of millions of people, learn from their behaviors and apply AI and machine learning to fine tune the models,” said Bluecore COO Rob Holland. “And we allow marketers to create rich, personalized campaigns quickly, because activation is also key.”
BlueVenn is an OG in the CDP space. The company, which combines marketing automation with CDP technology, was originally founded in 1999 as smartFOCUS and changed its name to BlueVenn in 2013.
But the underlying platform is pretty much the same, and so is the original value proposition, said Anthony Botibol, BlueVenn’s marketing director.
“We unify and dedupe the data – a lot of CDPs do that – but we differentiate with the marketing automation module of our platform,” Botibol said. “Because, yes, you need to look at all of a marketer’s data points to do identity resolution, but then you have to turn that data into something usable for marketing, like campaigns, personalizing the website or building models.”
BlueVenn’s main verticals are retail, travel and leisure, publishing and insurance, with clients ranging from Subaru and Hotelplan UK to The Washington Post and AAA – companies with multichannel marketing needs. “If it’s a digital-only business, we tend to back away, because we focus on the challenge of merging and matching offline and online data,” Botibol said.
Since the General Data Protection Regulation went into effect last year, BlueVenn, whose headquarters are in the United Kingdom, has also been getting a lot of inbound interest from marketers looking for help with compliance by organizing their data across systems.
Companies like Ensighten (and Tealium, see below) that cut their teeth in tag management and helping marketers implement and update tracking tags are increasingly finding themselves included on CDP RFPs.
It makes sense why, said Ensighten CEO Marty Greenlow.
“A tag management system implemented within the data layer is the basis of a good customer data platform,” he said. “If you don’t have data collection features and customer inputs, you can’t have a CDP.”Ensighten offers data collection and omnichannel personalization, but its main focus these days is on data security, compliance, auditing and helping prevent data leaks and breaches.
When Tealium, historically a tag manager like Ensighten, gets included on an RFP for CDPs, it’s usually for one of two reasons: A marketer needs help organizing its underlying data or help with campaign execution.
Tealium has had its own CDP, called AudienceStream, since 2013, which enables real-time data syncing to create a single customer record. But the company has struggled with the term “CDP” and how broad the definition is, said Adam Corey, Tealium’s CMO.
“On its own, it’s a great way to describe what we do – we help you manage customer data through the entire lifecycle,” he said. “But when so many companies with so many different features call themselves a CDP, that gets really hard for the buyer.”
Arm Treasure Data
Treasure Data is an enterprise CDP founded in 2011 that was acquired last year by semiconductor firm Arm for $600 million – one of the first acquisitions in the CDP space – and it performs all the classic functions of a customer data platform: building a unified view of the customer, creating audience segments and personalizing communications across channels.
The differentiator, said Erik Archer Smith, Arm Treasure Data’s marketing director for ABM, is making it extremely easy for marketers to onboard their data. The company has around 300 tech integrations, so all a client has to do is enter their login credentials for the data to start flowing.
“For a lot of other solutions out there, their dirty secret is that they’re good at activation, but it requires technical extraction or some form of extract-transform-load layer that they don’t actually do in order to get the data from the marketer,” Smith said.
Treasure’s clients include Mattel, Canon, Shiseido, Wish and LG.
Zylotech, a CDP founded in 2014, describes itself as a “self-learning customer intelligence platform,” which in less jargony terms means that its technology can automatically and continuously detect and create matches between customer data coming from different sources.
Once Zylotech has a unified ID, it’s able to propagate the data and related insights to different endpoints, whether that be Facebook, an app or one of the marketing clouds.
The primary use cases are ad targeting, personalization, cross selling, upselling and customer retention, said CEO Abhi Yadav, who noted that Zylotech’s sweet spot is marketers with multiple product lines and a need to promote loyalty and “ongoing customer experience.”
Most of Zylotech’s customers are large enterprise companies, including Dell, Staples, Keurig, Cisco and Oracle.
“The single biggest challenge is often data quality,” Yadav said. “Our clients find it extremely valuable to have a way to bring all of their data together without using too many resources.”