The Increasing Prominence of Customer Data Platforms (CDPs) in the Marketing Ecosystem: A 2023 Perspective

Data is the lifeblood of any business in the digital age. It helps businesses understand their customers, optimize their operations, and innovate their products and services. However, finding the best data for business growth is not an easy task. In fact, it is one of the biggest challenges that marketers face in 2023.

According to a recent survey by Gartner¹, more than 80% of marketing leaders said that they struggle to access and use data from different sources, such as online and offline channels, third-party providers, and internal systems. This leads to data silos, data quality issues, and data privacy risks.

To overcome these challenges, marketers need a solution that can collect, unify, and activate customer data from various sources in a scalable and compliant way. This is where customer data platforms (CDPs) come in.

What are CDPs and why are they important?

A customer data platform (CDP) is a software application that supports marketing and customer experience use cases by unifying a company’s customer data from marketing and other channels¹. CDPs create comprehensive and persistent customer profiles that can be used to build campaigns and customer experiences that attract and retain high-value customers.

CDPs are important for several reasons:

• They enable marketers to have a single source of truth for customer data, which reduces data fragmentation and duplication, and improves data accuracy and completeness.
• They allow marketers to segment and target customers based on their behavior, preferences, and attributes, which increases personalization and relevance of marketing messages and offers.
• They empower marketers to orchestrate and measure customer journeys across multiple channels and touchpoints, which enhances customer engagement and loyalty.
• They help marketers comply with data privacy regulations, such as GDPR and CPRA, by providing consent management and data governance features.

How are CDPs transforming the marketing landscape in 2023?

CDPs are not a new concept, but they have gained significant traction and popularity in the past few years. According to Forbes², the global CDP market size is expected to grow from $2.4 billion in 2020 to $10.3 billion by 2025, at a compound annual growth rate (CAGR) of 34.0%.

The growth of CDPs is driven by several factors, such as:

• The increasing volume and variety of customer data, which requires more sophisticated and scalable data integration and management capabilities.
• The rising demand for personalized and omnichannel customer experiences, which requires more advanced and flexible data activation and orchestration capabilities.
• The evolving data privacy regulations and customer expectations, which require more robust and transparent data privacy and security capabilities.

CDPs are transforming the marketing landscape in 2023 by enabling marketers to leverage customer data as a strategic asset and a competitive advantage. CDPs help marketers deliver more value to their customers and their organizations by:

• Improving customer acquisition, retention, and advocacy, which leads to higher customer lifetime value and lower customer acquisition cost.
• Enhancing marketing efficiency, effectiveness, and agility, which leads to higher marketing return on investment and lower marketing operating cost.
• Driving innovation and differentiation, which leads to higher customer satisfaction and loyalty, and lower customer churn.

How to choose the best CDP for your business?

With the growing popularity and diversity of CDPs, choosing the best CDP for your business can be a daunting task. There are many factors to consider, such as:

• The type and scope of customer data that you need to collect, unify, and activate, and the sources and formats of that data.
• The use cases and goals that you want to achieve with customer data, and the metrics and KPIs that you want to track and optimize.
• The features and functionalities that you need from a CDP, such as data ingestion, data quality, data enrichment, data segmentation, data activation, data orchestration, data analytics, data privacy, and data security.
• The integration and compatibility of a CDP with your existing data and marketing technology stack, such as CRM, DMP, marketing automation, email marketing, social media marketing, web analytics, and BI tools.
• The cost and scalability of a CDP, such as the pricing model, the deployment option, the maintenance and support, and the future roadmap.

To help you make an informed decision, you can consult various sources of information and guidance, such as:

• Industry reports and reviews, such as Gartner¹, Forbes², and IDC³, which provide market overview, vendor analysis, and best practices for CDPs.
• Customer testimonials and case studies, which showcase the real-world benefits and challenges of using CDPs for different industries and scenarios.
• Product demos and trials, which allow you to experience the features and functionalities of CDPs firsthand and evaluate their fit and performance for your business.

Conclusion:

Customer data platforms (CDPs) are the key to unlocking the potential of customer data for business growth in 2023. CDPs enable marketers to collect, unify, and activate customer data from various sources in a scalable and compliant way, and use it to create personalized and omnichannel customer experiences that drive customer acquisition, retention, and advocacy.

However, not all CDPs are created equal, and choosing the best CDP for your business requires careful research and evaluation. By considering your data needs, use cases, goals, features, integration, cost, and scalability, you can find the CDP that suits your business and helps you achieve your marketing objectives.