Customer-obsessed marketing

The CDP Paradox: A Chaotic Category Aspires To Address A Chaotic Challenge

Joe Stanhope
Vice President, Principal Analyst
March 8, 2018

“What’s your name,’ Coraline asked the cat. ‘Look, I’m Coraline. Okay?’
‘Cats don’t have names,’ it said.
‘No?’ said Coraline.
‘No,’ said the cat. ‘Now you people have names. That’s because you don’t know who you are. We know who we are, so we don’t need names.”
― Neil Gaiman, Coraline

As any marketer knows, names are powerful tools for repositioning challenges and articulating opportunities. I’ve been fascinated for years by our collective propensity to name new categories in the martech landscape. And right on cue, along comes a new name: Customer Data Platform, or CDP. Taken at face value, CDPs offer a streamlined and consistent method for collecting, connecting, and activating first-party marketing data. CDPs also share a mandate for self-service by marketers.

The CDP premise is rooted in a very real marketing challenge that brands endure on a daily basis: the applications of data are expanding rapidly, and traditional approaches for data handling aren’t keeping pace. Marketers need a new data fabric to support their customer growth strategies. This is an important problem, and it isn’t getting any easier when there’s always a new channel to access, new data to leverage, and more granular personalization to pursue.

CDPs exhibit many of the hallmarks of a very early stage martech category. Sweeping promises. Most of the noise is from vendors. The use cases aren’t always clear-cut. Vendors pivot into the category for the marketing benefits. This list goes on. What do enterprise B2C marketers need to know right now to start wading through the distractions of an emerging market and evaluate the validity and potential of the category? Forrester recommends keeping the following considerations in mind:

  • CDPs represent several distinct solutions. The CDP landscape is currently populated by a set of vendors that do very different things. The most common CDP flavors include 1. pipes for distributing data, 2. insights systems that support attribution and targeting, 3. engagement systems that support basic personalization, and 4. mid-market cross-channel campaign management solutions building on their execution capabilities.
  • CDPs do not replace a holistic data management strategy. Brands must consider how a CDP intersects with – or enhances, duplicates, or abstracts – existing data collection, data management and hygiene processes, and the identity resolution strategy. And because a CDP introduces another data repository into the mix, brands must plan for its impact on marketing operations and processes, and other environments such as DMPs (which, to be clear, primarily support third-party audience targeting for display), marketing or CRM databases, and engagement tools.

All of this goes to say that marketers need airtight requirements to establish their own perspective. If you’re considering a CDP (or anything else, for that matter), you need a very clear view of your needs, and the insights and engagement use cases the solution must serve. If you take a shotgun approach to shopping for CDPs, thinking you’ll sort out the details later, the process will run you rather than the other way around.

Watch this space!

Forrester will continue to explore CDPs and their relevance to enterprise B2C marketing in 2018. We’re most interested in identifying the ideal applications and types of organizations where a CDP solution may be appropriate.

This is a rapidly evolving market and I’m looking forward to more dialogue about CDPs. We’d like to hear what you think, and if you’re interested in participating in upcoming research about CDPs please let us know. To discuss CDPs further send me an email, set up an inquiry, or request a briefing.

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