Customer data platforms (or CDPs) have become part of the mainstream marketing vernacular perhaps quicker than any comparable technology. From a niche idea only a few years ago, 2017 and 2018 saw many marketers make room in their technology stack for this versatile and efficient technology, to the point where CDPs have become common place.

So if you haven’t considered it yet, should your brand implement a customer data platform (CDP)? (TL;DR yes probably)

The exact definition of a CDP varies greatly depending on who you ask. The CDP Institute, probably the most authoritative source on the subject, define CDPs as:

"Packaged software that creates a persistent, unified customer database that is accessible to other systems."

So there are three features critical for a CDP:

1. It must be ‘packaged’, i.e. pre-built, requiring minimal technical resources to deploy and operate

2. Data from different sources are integrated at an individual customer-level*

3. It must have the ability to ‘push’ this customer data to other systems and platforms for activation or analysis. 

Unfortunately, this is where the simplicity ends. How and where data can be ingested, integrated and activated varies greatly by the CDP vendor – and there are a lot of them. This can make vendor selection the most time-consuming and aggravating aspect of implementing a CDP, as it must be carefully planned around already established technologies and requirements.

*To further complicate matters, a customer data platform doesn’t only hold information on customers, but rather any user that you can identify across your ‘first-party’ data sources.

In the race to deliver on the promise of joined-up personalised marketing communications at scale, marketers’ technology stacks are becoming a tangle of digital spaghetti.

Many brands are still getting to grips with the integration capabilities of suites like the Google Marketing Platform or Adobe Experience Cloud. But for brands investing significant media budgets outside of those ecosystems (social media, other exchanges and DSPs) or looking to join up communications with non-paid media platforms like email, audience management is a significant technical and operational challenge.

Compounding this is the fact audience and customer segmentation generally takes place in silos, meaning users may be falling into differently-defined ‘buckets’ across different platforms, which breaks any intended consistent experiences. A single customer could end up seeing very different communications on Facebook compared to what they see via email.

So the prime benefit of a CDP, and the one that makes this technology so timely, is the ability orchestrate communications across multiple channels and media consistently at a user-level.

Data management platforms (DMPs) are sometimes confused, but do indeed solve for some of the same use cases. The main difference is that DMPs are used to manage audience profiles, almost exclusively, in digital paid media channels via cookie data, so are largely temporary. On the other hand, CDPs create persistent audience and customer profiles from cookie and CRM data.

What’s more, DMPs tend to require significant budgets in addressable digital media to pay for themselves by efficiency or enhanced capabilities. This isn’t the case for a CDP. Both types of technology are versatile and can offer enormous benefits to a savvy marketer, either in isolation or in combination.