How come everyone’s talking about CDP now?
If you haven’t heard the acronym “CDP” yet, it’s just a matter of time. CDP has arrived at an opportune moment—a time in which companies are starting to see their data as an important asset and when there is increasing concern over respect for privacy.
Image 1: Search trend for “Customer Data Platform” according to Google Trends.
The winds of change
One of the reasons underlying this increasing concentration on data capture is partly due to the fact that we have concrete proof of data’s impact on business. You only need to compare the ten largest companies in 2006 to those of 2017 to realize that data is a very valuable asset. This comparison leads to the realization that new members of this select group have one thing in common: They generate, control or profit from activities related to good data management.
Image 2: The changing of the guard amongst big companies seems to have come about as a result of data, or more specifically the use of data as a revenue stream.
Respect for privacy as a part of customer experience
“With great power comes great responsibility.” Despite all the new opportunities offered by good data management, they cannot be acted on without putting the user at the heart of your data strategy. This probably comes as no surprise in and of itself, but the related technological challenges are significant.
Take, for example, coming to a better understanding of the challenges related to managing user data. Even today, it’s still difficult to simply erase one user from every marketing system at an organization without a laborious manual process. This simple task gets more complicated if you add more elements to your marketing stack. This is another important task that can be efficiently managed by a CDP. Besides addressing the issue of data integrity, a CDP can also manage all the personal data fields in order to provide them with different levels of security, thereby ensuring good customer data management.
In response to the issue of respect for privacy, data capture itself is currently undergoing a period of great change. I could write a whole article on the subject, but in simple terms, we are currently experiencing a strong shift toward capture using first-party cookies instead of third-party cookies. Why is this important? Because CDPs were created to manage data from first-party cookies, which is yet another reason you’re probably hearing more and more about CDPs.
So what’s the difference between a CDP, a CRM and a DMP?
A CDP does not compete with the tools you currently have in place, such as your CRM. Instead, the CDP acts as a conductor by positioning your current tools as data sources (data capture) or destinations (data activation), or both at the same time. Because each of the source systems generates data in a different way, the CDP also standardizes the different formats in order to enable activation through your various interaction channels (email, advertising, personalization, etc.).
So how should a CDP, a DMP and a CRM be compared to each other? The best way to differentiate between these platforms is to start by looking at what types of data are managed by these technologies. You could begin by making an initial grouping of the CDP and the CRM, since both offer first-party data management as their principal feature. On the other hand, the DMP focuses mainly on third-party data and its main use case is for advertising (even though many DMPs offer other additional abilities).
Now that we’ve clarified how a DMP is essentially different, what is the difference between a CDP and a CRM? Marty Kihn, SVP of Product Management at Salesforce Marketing Cloud, emphasizes that the CDP category could be seen as an evolution of CRMs. I support this view, because a CDP is an evolved CRM from the perspective of activation channels and their way of capturing data.
Data integrity is a particularly important issue for CRMs since these systems are often fed data by humans. In the case of a CDP, data are provided through an automated approach implanted directly where the data are generated. Because of this, real-time marketing, identified as a transformational trend by Gartner in 2019, has become the way organizations armed with CDPs do things instead of being a hard-to-achieve ambition. Here is a brief chart that covers the main differences between a CDP, a DMP and a CRM.
What benefits can be expected from a CDP?
Now that you better understand what a CDP is, it’s important to know what benefits you can expect to receive if you install one. To state the potential benefits in highly simplified terms, I would say that a CDP allows you to have a technological foundation for delivering on your omnichannel promise (cohesion, real time, personalized experience) in addition to providing a robust foundation for the proper management of user data.
I suggest there are five benefits generally provided by a CDP. It’s important to remember that several other benefits also exist, depending on your business model for your marketing efforts, but here are the main benefits a CDP offers organizations.
