The CDP Institute is a good place to start for a primer of the purpose and definition of a customer data platform (CDP). It may strike one as odd that there's an institute devoted to this type of platform, but it's actually quite novel and we're lucky to have this sort of thing. Usually, when a new technology or innovation comes along, there's a scramble to claim and define it by commercial interests. That is often very confusing to prospective customers. With the CDP Institute, there's a unified and consolidated body of information for marketers to learn from.
Why a CDP? Why not a DMP?
It’s simple: because you need your data to do more than what a DMP can do with it. There's no institute attempting to define a DMP, unfortunately, but their role is well-established at this point in the industry. They are systems which allow you to send your 1st party data in so they can consolidate it with other 3rd party data -- data they won't directly share with you -- and then coordinate audience targeting in adtech platforms on your behalf. This can be great for the effective leveraging of your 1st party data, so why not just use that and forego the CDP?
Because your 1st party data can do a lot more for you than just inform ad targeting. It can personalize your site for each visitor and trigger new engagement at each turn of a user's journey. A DMP does not enable this direct use of your data, it only enables the indirect use for retargeting.
DMPs have a singular purpose -- they host an advertising optimization party for you. And if you only have a DMP, then that’s the only value you’ll get from your assets. This is why the answer is not either DMP or CDP. It’s both.
Of course, no DMP vendor worth working with will tell you that they can do what a CDP does, so watch out for that. It's a telltale sign that you are not working with a strategic partner (or at least, a good account executive). In fact, if any of your DMP, DSP or marketing automation platform reps call you and claim they are a CDP, make a check mark in the 'shady' box of their CRM contact record.
What do big shop consultants have to say about CDPs?
Gartner and Forrester are behind the times on this topic. They still haven't caught up to what a CDP is. It's a flaw of their business model, really. They rely on the product vendors to tell them what's going on as much as we do, with the added condition of pay-to-play. That's right, your trusty consultants expect to be paid by the vendors to review and rate their products. Then they expect to be paid by you to give you that information. They're taking at both ends, and whatever you think of the business model, the objective result is that it slows down their ability to assimilate and deliver useful information.
If you're relying on Gartner or Forrester for your strategic vision on CDPs, you are years behind reality. Don't do that. They are good for helping businesses with management that only can be swayed by high-cost, big-name opinions about what innovators already know. If that describes your company, then add CDP consideration to your 2021 technology roadmap and enjoy the paycheck until then.
How do I know a good CDP from a bad one?
Above and beyond the core defining aspects mentioned above, there are some more key features to look out for. The number-one aspect of a good CDP is real time data activation. Activation means taking a data point and distributing it to any and all systems which are capable of taking action with it, the moment that data is obtained. Batch data processing does not cut it in the current age -- our customers expect us to obtain and handle their data responsibly, and that includes with efficiency and without delay.
Another aspect of a CDP is the means through which identities are resolved. The activity of collecting data from devices and associating them together to represent a single individual is called stitching. This can be done both deterministically and probabilistically. A good CDP can do both types of stitching.
There's more to it, of course
If you'd like to learn more about what a CDP can do for your marketing strategy, don't hesitate to review our services and reach out to us.