Customer data platforms have reached the pinnacle of the hype cycle. Expectations are soaring. Venture capital is flowing. And yet everyone is still trying to explain how and why CDPs are any
different from the many martech acronyms that preceded them.
According to Gartner, “A CDP is a marketing system that unifies a company’s customer data from marketing and
other channels to enable customer modeling and optimize the timing and targeting of messages and offers.” This definition seems straightforward enough, and it explains why CDPs are generating so
much buzz: in a world of increasing device proliferation and audience fragmentation, marketers rightfully want to access data about their own customers, control who can access it, and activate and
measure it across any channel.
But are the vendors self-categorizing as CDPs — a bizarre hodgepodge of cloud-hosted CRM databases, enterprise data management, marketing
dashboards, personalization engines, data modeling companies and warmed-over DMPs — truly executing on this ambitious goal?
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Not on their own.
The reality is that executing against the promise of a CDP requires something that CDPs simply don’t have: an identity network — a living, breathing, real-time understanding of
customers and their actions. Which means that before marketers can derive the benefits they expect, they need a plan for resolving identity across every platform and consumer
touchpoint.
Identity Is More Than a Match Table
Marketers want a single view of their customer. It’s certainly a goal of the CDP and its
predecessors. However, as Gartner correctly notes, the CDP runs counter to obtaining and executing against that single view.
Here’s the problem: CDPs may connect data
between internal marketing systems, map IDs of logged-in customers, or match cookie-based IDs to mobile device IDs. But without an identity network that stretches across all internal and external
identifiers, CDPs fail to address the complete experience for existing customers and prospects alike.
It’s not just about the holistic customer view, for that matter:
it’s also about activating data via all addressable channels, including paid media, often in real time. The fact is, even if you can reliably identify a customer, timing is everything when it
comes to delivering relevant messages throughout her customer journey, but because CDPs lack an identity network, they cannot keep pace with a consumer’s moment-to-moment needs and expectations,
and inevitably fail to reach her at the right time.
Consider this simple example: a retailer directs its retargeting partner to only retarget individuals who have not made a
purchase from its stores or website in the last 30 days.
Because CDPs and other data platforms suffer from the time lag inherent in how their systems pass information to one
another, the latency is such that even if the system achieves a healthy match rate, marketers have missed their customers by the time they’ve recognized them … meaning that an individual
has likely already been served dozens of ads for a product she already bought by the time the system recognizes that she visited a store and made a purchase.
No less frustrating,
insights from a CDP aren’t portable from campaign to campaign, let alone from vendor to vendor. CDPs are de facto walled gardens, locking marketers into an ID that isn’t compatible with
other systems — another fundamental limitation stemming from their lack of an identity graph. Without this always-on identity component, each audience-building campaign must start from scratch
through connections with third-party platforms.
Like CRM, DMPs and countless other acronyms, CDPs hold promise, but the landscape today is much too amorphous and ill-defined.
Marketers need to look past the CDP hype, and prioritize solving for the challenge of actionable identity resolution before adding yet another piece to the marketing technology stack. Otherwise they
are destined to find only disillusionment.