The buzz around the Customer Data Platform (CDP) technology category has exploded in recent years. I don’t think a day goes by when I don't run into an article that mentions CDPs (although I am a tech marketer). But as with all new martech classifications, there is a lot of confusion about what a CDP is and how it differs from other marketing technologies. As you continue on your journey to understand the CDP, identify whether your company needs one, and determine how it will interact with your other solutions, we’ve compiled some customer data platform stats that speak for themselves.
Let’s get into the numbers!
There’s a Definite Need for the CDP
The CDP Institute defines a CDP as “packaged software that creates a persistent, unified customer database that is accessible to other systems." There’s a need for a unified customer database that can act as an easily accessible single source of truth and allow marketers to truly understand each individual customer — especially as marketers have been struggling to connect customer data across their organizations for a long time.
- 52% of marketing leaders responsible for data and analytics cite data management, data integration and formatting as some of their most time-consuming activities [Gartner]
- 46% of marketers only have data from a few of their channels connected, while over a quarter (27%) do not have any channels connected [Researchscape]
- One third (31%) of marketers say that “access to data” is a major obstacle to making personalization a greater priority in their organizations [Researchscape]
- 39% of marketers struggle to integrate offline and online data [Forrester]
- 93% of executives expect that using more customer data in their campaigns will “create a noticeable shift in their ability to meet disruptive and competitive challenges” [Forbes]
The Category Has Seen Tremendous Growth
We’ve all seen Scott Brinker’s marketing technology landscape graphic, and the 2018 edition shows 64 CDP vendors. The CDP Institute claims that the number of vendors grew considerably last year (so we’re on track to see more logos in the CDP section of Brinker’s graphic this spring).
- 29 new vendors emerged in the industry during 2018 — according to the CDP Institute: “an increasing number of vendors offer products that were originally developed as CDPs, rather than older products that have been repositioned as CDPs after starting as something else” [CDP Institute]
- Estimated total CDP market size grew more than 50% during 2018 to reach $740 million [CDP Institute]
- Industry revenues are expected to reach $1 billion in 2019 [CDP Institute]
CDPs have Piqued Marketer’s Interest... and Budgets
Of course, if the CDP industry is growing, someone has to be buying. And as we all know by now, marketers are definitely showing interest in CDPs. They’ve been submitting inquiries to analyst firms to help them learn more about the category, and they’re deciding to invest in the technology.
- In 2017, Gartner client inquiries about CDPs quadrupled over the previous year, and inquiries doubled between the first half of 2017 and the first half of 2018 [Gartner]
- A total of 78% of the companies survey by Forbes either have, or are developing, a customer data platform [Forbes]
CDPs are Making an Impact
It’s still early to fully determine the results marketers are generating with their CDPs, but there are some early indicators of success. A study by Forbes Insights of over 400 marketing leaders found that nearly half of marketers that use a CDP believe that it helps drive customer loyalty — while a study by The Relevancy Group identified the top tactics enabled by CDPs in the graph below.
- 44% of organizations surveyed by Forbes Insights report that a customer data platform is helping drive customer loyalty [Forbes]
- 62% of companies that leverage a CDP use it to enable individualized personalization in email, 55% for advertising and 53% for real-time targeting [The Relevancy Group]
Clearly, you can’t ignore the potential value of a CDP. But our advice is to avoid getting caught up in the buzzword. Do your research and determine if your organization needs a CDP (if you don’t use one already), but don’t lose sight of your actual business needs. Don’t just get a CDP to check the box. Instead, ask yourself what challenges and objectives your company has relative to your customer engagement strategies. Then assess what functionality and data you’re lacking with your current systems to help you determine if a CDP could help.
To advance your knowledge of CDPs, be sure to check out this white paper, which provides clarity on the three levels of CDPs and the functionality and value they deliver at each level. And request a demo today to explore whether Evergage could be the right CDP for your organization.