Last week Gartner published its 2019 update of the Hype Cycle for Digital Marketing and Advertising, where the Customer Data Platform (CDP) category is now teetering on the “Trough of Disillusionment.” We’re excited about this progression into the “trough,” because it will clear the field of vendors claiming to be CDPs and reduce confusion for marketers. This will be a good thing for all companies wanting to activate first party data and wondering if a CDP is the best way to do it.
But until we’re on the other side of the “trough,” marketers evaluating CDPs will continue to face a confusing swirl of similar types of capabilities, solutions, and buzzwords across the CDP space. To help marketers cut through this noise, we’ve divided the wide array of CDP vendors into five core categories. By understanding the strengths and weaknesses of each category, marketers can narrow the field of potential vendors and focus on which ones are the best fit for their organization.
Five major categories of CDP vendors
Let’s walk through the five major categories of CDP vendors, and explore the circumstances that would favor each of them.
1. Digital Data Shufflers
“Digital data shuffler” CDPs have a focus on moving digital data from one source to another. They can integrate data but they have no persistent database and therefore there is:
- No identity resolution
- No single customer view
- No insights that can only be derived from a single customer view
Example digital data shufflers include tag managers, integration solutions, and other marketing service provider-type solutions that integrate data between specific systems but do not provide a centralized, unified solution on their own.
These CDPs are good for use cases where a brand wants to feed one, two, or a few data set into one, two, or a few specific execution channels without resolving customer data into a clean record or gaining insights from a master customer data record.
2. Easy Buttons
These CDPs advertise a compelling “easy button” for their solutions. They align with somewhat simplistic use cases, and similar to digital data shufflers, easy-button vendors specialize in ecommerce-only use cases or basic CDP use cases such as website retargeting. Easy-button CDPs can be useful for small to medium sized businesses, but aren’t equipped to scale for enterprise needs. These solutions:
- Unify and activate data from digital channels but lack support for physical channel data (store, call center, and other offline data must reside outside the CDP)
- Can’t provide a single customer profile with a unified view
- Are not useful for businesses with offline channels
Example “easy button” vendors include some CDPs and non-CDPs with a specific vertical or ecommerce focus. For companies earning less than $50M in revenue annually, with minimal channels of customer engagement, and for minimal interactions with customers per year, easy-button CDPs can be a good option for getting started with unifying, understanding, and executing campaigns based on some aspect of centralized customer data.
These CDPs are good at activating profiles but aren’t very good at creating a single customer profile from which to execute. They combine some parts of CDP technology with a focused channel of execution, and offer an “all-in-one” approach to managing and acting on data. Typically their drawbacks are:
- Lightweight identity resolution
- Minimal view into who your customers are
- Limited customer analytics, reporting, and BI tools
These drawbacks can be acceptable for brands that want to activate single silos of data or personalize based on very basic segment criteria (e.g., personalizing a website experience based on whether the visitor is new vs. returning, not based on that visitor as a unique individual). Or, for companies that want the power of the execution channel but also want a mature CDP driving customer engagement, they may use two types of CDPs together. (You can read more about the distinction between CDPs and tools like personalization engines here.)
4. Marketing Clouds
This year, SalesForce, Adobe, Oracle, and others have announced that they are building their own CDPs. This is in response to the strong market demand and growth of the CDP category, which these large companies can no longer ignore. We’re excited to welcome them to the CDP party, but we advise marketers evaluating CDPs to treat these cloud announcements with caution. Specific capabilities that seem to be missing are:
- A centralized database from all customer touchpoints, across silos (important for these reasons)
- Identity resolution (of any kind)
- Analytics, reporting, and customer insights
A CDP cannot be built overnight, even with all the resources in the world at one’s disposal. It takes years to get real-world, enterprise customer feedback, incorporate that feedback into the platform, and evolve the platform to meet real-world needs. Cloud vendors are scrambling to get a minimum viable product out the door, and if they build these solutions from scratch (rather than through M&A activity), it will take them several years to catch up to what the independent vendors have already developed.
Also, in our experience, many of our customers build marketing stacks from a range of different cloud technologies (e.g., ERP from Oracle, ESP from SalesForce, call center from SAP, etc.). While marketing clouds are working to integrate data and make it actionable within their own systems, the rest of the world is looking for CDPs that can unify, analyze, and orchestrate data across all systems, and right now independent CDPs are the best way to make that happen.
5. Mature CDP Vendors
The truth is that it takes time to test and perfect a SaaS solution that is enterprise-ready, and there are only a small handful of vendors with the experience to ensure CDP success for their customers. AgilOne is one of these vendors, with over 13 years of experience.
Mature CDP vendors demonstrate their leadership in the industry because these CDPs:
- Create a persistent database with a robust single customer view
- Provide comprehensive identity resolution
- Use machine learning to provide deep insights into customer segments and harness these intelligent segments for 1:1 engagement
- Are configurable to meet unique enterprise business requirements
- Have built a platform that is scalable, real-time, and secure
Choosing the Right CDP
In the latest iteration of the Hype Cycle, Gartner recommends that companies evaluating CDPs explore “each vendor’s offering with an eye toward existing platform integration, identity resolution, customer analytics, and the skill sets required to deploy and use the software.” And we second that recommendation. A CDP isn’t meant to be entered into lightly, and we recommend that companies interested in a CDP take clear stock of their use cases, and select a CDP that will meet the needs they have.