Revolutionizing Customer Engagement Through Customer Data Platforms
THE COWEN INSIGHT
The broader Customer Data Platform (CDP) ecosystem has become mainstream over the last 18 months, evidenced by M&A, private funding, IPO & growth acceleration activity. We think the stack plays of Data+Analytics+Engagement will play an instrumental role in the next architectural cycle in Marketing & Customer Engagement.
What are Customer Data Platforms?
Customer Data Platforms (CDPs) are database like systems that collect, process & analyze vast amounts of unstructured data from digital customer interactions. CDPs represent the next evolution in the CRM Marketing & Customer Engagement space, leveraging AI/ML to deliver real-time intelligence, personalization & automation. Shifting consumer behavior & changing privacy rules have acted as catalysts for CDP adoption, with incumbents and new entrants alike racing to build new apps & embrace new architectures.
What Is the Value of CDPs?
Its main value prop is to provide a full view of a consumer’s behavioral attributes so companies can segment & target users in a more intelligent, personalized & automated fashion. It was born in part due to the tech limitations of other front-office systems like CRMs & DMPs. It was further catalyzed by COVID and new privacy policies. After years of incubation, we think the CDP market is hitting a new inflection point. We believe CDPs, and the broader ecosystem of vendors forming around Modern Data Management, represent the next frontier of Customer Engagement investments.
Contextualizing CDPs in the Broader Software Landscape
Market awareness and understanding of CDPs are opaque because:
- the ecosystem landscape has been evolving
- there are no direct pure-plays in the public markets
- much of the innovation is happening in the private market or within larger SaaS suites
We dive deep into a CDP’s technology components, value delivery & how it resembles an ETL/EDW/BI kind of stack. We outline the broader ecosystem of vendors (public & private), how the partnerships work, where specific product roadmaps are heading & how this could change the competitive landscape. We discuss key differences between a CDP, a DMP and a CRM, and how both market & regulatory trends are impacting investments across these areas.