CDP or Customer Data Platform has been the talk of brands, agencies, and publishers for the last 24 months. But what really is a CDP and is it really worth all the hype? Let’s first start by breaking down what a Customer Data Platform is. A Customer Data Platform (CDP) is a brand managed platform that brings together data from multiple places to create a unified profile of a singular customer.
A CDP can identify a singular customer from multiple data sources (online/offline, web, CRM, email, digital advertising/social advertising, Point Of Sale) using a unique id. It can identify known customers and unknown customers (prospects).
A known customer’s unique identifier could be an email address, which is anonymized across multiple data streams to develop the customer profile. For unknown customers, or prospects, it’s getting a bit more complicated. With the demise of 3rd party cookies and strict privacy regulations from ITP/ETP Safari and Firefox browsers, identifying prospects has become a lot more challenging.
The importance of 1st party data has become increasingly more important with the capture of PII (Personally Identifiable Information) via website forms and POS (Point Of Sale) systems. Brands and agencies should have a network of publishing partners that have their brand’s target audience in mind, and align with the brand’s image, lifestyle, demographic, and psychographic attributes in order to target and track against.
Entering into strategic partnerships for 1st party data exchange that are anonymized and mutually beneficial for each party are other ways brands can track, target, and identify prospects via a CDP.
There are a number of CDPs out there on the market today, many have a lot of features. Below are the top things to look for when investigating a CDP:
Top CDP Capabilities
- Data Ingestion
- Identity Resolution
- Online/Offline Data
- Data Standardization and Hygiene
- Leverage Structured & Unstructured Data
What are the advantages of a CDP?
- Allows brands to offer personalization at scale with a very prescriptive use case
- Here is a real world example: A travel company would like to send push notifications to travelers on a trip for activity or restaurant recommendations with real-time wait times. The company has data on travelers’ preferences and behaviors from existing customers in their CRM. They decide to partner with an airline to do a customer match, and the airline shares anonymized flight information back to the travel company. The travel company knows when the individual will be traveling based on flight departure and arrival cities, and booking dates the traveler has made on its platform. Based on these insights, the travel company can provide highly personalized experiences suggestions to its customers by knowing when their customers are on a trip, what they like to do when they are on a trip, and what might be available in that locale.
- Automates key data and reduction of manual tasks
- Allows marketing teams to focus on planning, execution, and optimization of key campaigns CDP serves as the hub and spoke for all data that is centralized and a reliable and trusted source of data accessible for all stakeholders
- Speed To Market: Allows marketing teams to execute faster because the technology stack is likely owned by marketing rather than sitting with enterprise IT teams
- Greater Privacy & Compliance Control
- CDP helps you stay compliant with GDPR/CCPA
- Gives explicit opt-in controls & permissions
Back to our original question we opened with at the beginning of this post: Is a Customer Data Platform worth the hype? The short answer is – it depends:
If your organization is ready to invest time, resources, capital, has defined business use cases, and is committed from a people, process, and technology perspective to implement a CDP, then the answer is yes – as implementing a CDP E2E could be anywhere from a 6-18 month implementation process.
The advantages in delivering a highly personalized customer experience at scale are very high. Highly satisfied customers cite they stay with a brand because they received very contextually relevant content and communications and therefore, are more likely to buy again from that brand due to that personalization, rather than from a brand that offers a similar product or service but does not personalize their experience.
If, however, the organization is not mature enough in its data evolution to understand the long term strategic implications of a CDP, or can’t commit to organizing people, process. and technology around implementing a CDP, then it may not be right for that organization.
