The future
of CDPs
The future of CDPsBy 2023, all vendors have successfully checked the boxes of unification, analytics, and activation, but now vendors are racing to fulfill the next generation of buyers’ needs. Below are five trends indicating where CDPs are going next.
Self-service data management. IT buyers are demanding self-service data management capabilities, evidenced by nearly half of all brands saying implementation flexibility is a priority. This comes as a result of IT wanting to avoid expensive (and sometimes slow) support from vendors to fulfill tasks around data ingestion, transformation, and outbound channel integration. And while virtually all types of organizations benefit from these self-service capabilities, enterprise brands demand them most as their evaluations are often IT-led and business-assisted.
Composability. Fifty-one percent of organizations say they have a great or very great amount of redundant or unused technology. As a result, brands seek to leverage their past investments and reduce duplicative capabilities. This has become increasingly important as organizations pursue building a customer 360 inside their cloud data warehouse (e.g., AWS RedShift, GCP BigQuery, Snowflake, Databricks). Brands have decided they want their customer data to stay inside their existing warehouse, enabling benefits of increased protection against data breaches, decreased CDP storage costs, and lower maintenance of data flows. This has encouraged vendors to create push-down querying from the CDP wherein users’ data needs are fulfilled (i.e., computed) by the brand’s existing data warehouse, and the results are sent back to the CDP for visualization and downstream activation.
Experience decisioning. Perhaps the most forward-looking trend is buyers’ needs for experience decisioning to be included in the CDP. If CDPs promise to be the brain of the stack, enabling a cohesive customer experience wherever the customer shows up, then in-the-moment decisioning is what’s needed to enable it. The cliché, ‘Right message, right channel, right time’ has resonated with buyers seeking to have a central command center for their stack. And vendors have already begun delivering capabilities to assist this goal, including canvas-enabled journey orchestration (supported with embedded journey analytics), rule-based next-best-action, and sub-second APIs that read, update, and respond to inquiring channels. Forrester found 63% of brands saying real-time or near-real-time data processing in their CDP is a priority, and Gartner found experience orchestration features have been the fastest growing feature set in the CDP market. What’s further on the horizon is machine-learning-based next-best-action decisioning that occurs in sub-second intervals. This would enable the CDP to act like an omnichannel personalization tool that reads and reacts to all signals from all channels in order to decide what experience (or offer) is best for the customer in each moment.
Open APIs. Furthering IT’s needs for customization—most commonly in the enterprise market where maturity is the highest—vendors have been asked to create open APIs. This capability opens doors for tasks like custom application integration, automated multi-brand implementations, real-time troubleshooting, and more. Look for this trend to continue throughout the decade.
Data governance. Lastly and certainly not the least is the demand for more privacy capabilities. As first party data increasingly becomes an organization’s treasured asset, brands are seeking control on who has access to it and what tasks they’re allowed to use it for. This has put pressure on vendors to increase governance capabilities in their CDPs, including data labeling (i.e., tagging data as sensitive or only usable by certain roles or even for certain tasks like analytics) and highly configurable role permissions (i.e., which users have access to what data and have the ability to perform what tasks with the data, such as importing, exporting, etc.)
