CDP might sound like another martech or adtech acronym that will make its way into obscurity, but in a post-GDPR world where first-party relationships will be vital to survival, the Consumer Data Platform (CDP) is the ultimate tool for true consumer or audience identity resolution. During his presentation, “All You Need Is CDP,” at OpsNY on Tuesday June 4, Jonathan Mendez, Partner, Products & Data at Arkle Advisors will dive into why the CDP is a groundbreaking technology and how it will shift the very fabric of advertising. But in the meantime, we’ve got you covered on the basics.
The Rise of CDPs
In 2018, Gartner named CDPs as one of the top six rising marketing technologies. According to a 2017 report by the Consumer Data Platform Institute, CDP vendors had more than $300 million revenue in 2016, and the industry is expected to grow at least 50% per year in the near future, reaching over $1B total revenue by 2019. Growth in CDP adoption will come from a better understanding of the technology’s ability to provide deeper insight into customer’s behavior based on first-party data, as well as the ability to drive real personalization across all contacts with customers based on those insights.
What Exactly Does a CDP Do?
The Consumer Data Platform Institute defines a CDP as: “A Customer Data Platform is packaged software that creates a persistent, unified customer database that is accessible to other systems.” In other words, a CDP collects and unifies customer data from multiple sources into a single profile to create and manage segments and then push those segments into an execution tool. Data from any user engagement channel can be brought in to create a unified, persistent view of customers for better analysis and targeting, providing metrics across various marketing initiatives, such as site visits, campaign results and content performance and customer journey. Since data is made available in real time with machine learning at the core, the possibilities for predictive modeling are endless. It’s like knowing your opponent’s next move in a game of chess.
How a CDP differs from a DMP or CRM?
While you might still be thinking what can a CDP do that my DMP can’t do. CDPs use first-party data (and can combine it with second-and-third party data) and identity resolution to provide a single customer view that can be accessed in real time for a host of marketing, advertising and customer experiences needs. CDP data is continuously processed and maintained a persistent customer record over time. DMPs work with third-party data—coming from cookies, device IDs and IP addresses— with some ability to include first-party data, to build anonymous audiences for advertising purposes only. These DMP records are only processed every couple of days maintained for a short period of time. Besides, DMPs don’t easily share data with other systems in the way that CDPs do.
As far as CRMs are concerned, CRMs are more of an engagement tool without the ability to ingest data from the unlimited online and offline sources that CDPs can.
How Can CDPs Help With Privacy Regulations?
The idea that a CDP can ingest all forms of data might prove alarming for publishers and advertisers looking to comply with privacy regulations such as GDPR and CCPA. But David Raab, founder of the CDP Institute believes that CDPs are actually a complement to compliance. “CDPs are genuinely well suited to help with GDPR. They’re built to solve two of GDPR’s toughest technical challenges: connecting all internal sources of customer data and linking all data related to the same person. In particular, CDPs focus on first party (i.e., company-owned) personally identifiable information and use deterministic matching to ensure accurate linkages. Those are exactly what GDPR needs,” he wrote last year.
A CDP brings your anonymous and known data into one place, tracking when, where and how that data came into your systems, as well as customer preferences for being contacted. This provides a digital chain of custody.
CDPs Are Not Yet Perfect but They Have Great Potential
Since many current CDPs emerged from Tag Management Systems so the ability to live up to the full promise of a CDP is not fully baked in. For one, not all CDPs have identity resolution at their core. Some offer integrated ID resolution, while others rely on third-party systems or expect IDs to be provided upon inputs.
Check out Jonathan Mendez, Partner, Products & Data at Arkle Advisors at OpsNY on Tuesday June 4, where he’ll dive into why the CDP is a groundbreaking technology and how it will shift the very fabric of advertising.