The Customer Data Platform (CDP) market is growing exponentially and is expected to reach a whopping $10.3 billion by 2025. CDPs are all the rage right now among contemporary, far-sighted marketers, and with good reason. To understand that reason, let’s unpack an intelligent marketer’s data needs to navigate decisions and, more importantly, marketing excellence.
You must keep up with your customer’s purchase journey through multiple omnichannel touchpoints – that Facebook ad click, that ecommerce website search, that DOOH impression, the store visit. The list goes on!
Your adtech and martech stack and your data sources are fragmented – multiple SaaS and cloud solutions that track customer engagement, interests, affinities, customer lifetime value (CLV) and more.
You must consider the integrity and privacy of your customer data to stay compliant and earn customer trust.
With all of these channels and all of this data and related use cases, is it any surprise that data and insight bottlenecks and inefficiencies creep in over time? How do you deal with the data silos, privacy issues and fragmented martech stacks?
Enter the Customer Data Platform.
Customer Data Platform: A 101
Before we get into the reasons why a CDP is an excellent investment in 2023, let’s understand what a CDP is.
A Customer Data Platform, commonly known as CDP, is a tool to collect, clean, and activate customer data. Data sources typically include websites, mobile apps, adtech and martech systems and CRM tools. The CDP then stores this data in a central location, making it accessible to other systems, such as marketing automation platforms and analytics tools. Ultimately, it powers targeted and measurable marketing
So, yes, CDPs can solve many of your data and insight bottlenecks. But are they an urgent investment? How time-sensitive is your decision to switch to a CDP in 2023?
Your most significant marketing requirement in 2023 is a single, unified view of the customer’s journey. With customers interacting with brands across multiple channels, devices, and touchpoints, it becomes near-impossible for marketers to keep track of all the data generated by these interactions, make data-backed ad and marketing decisions, and deliver personalization to reduce budget waste.
And that’s the driving force of CDP investments. In fact, a survey by Forbes Insights found that 78% of marketers consider CDPs vital to their marketing and advertising technology strategy.
2023 is the year to invest in a robust Customer Data Platform
With an economic downturn threatening marketing budgets and consumers’ and regulators’ increasing data privacy concerns, every marketer would do well to consider CDP as an urgent and crucial investment. Here’s why.
1. Targeted ad & marketing, CX to navigate the economic downturn
Brands and businesses worldwide were just about emerging from the pains of the pandemic. And they’re walking straight into what all experts are calling a global recession. And you know what a recession means – budget cuts! A CMO survey, for instance, shows that the economic climate has already led to 42% of US companies cutting their marketing budgets. And they are not alone.
Marketers at global organizations to mid-size businesses are under pressure to reduce ad spending and demonstrate marketing ROI. And it’s only possible with hyper-targeted and measurable campaigns.
In these constrained times, marketers need to source the most accurate and current customer data across various touchpoints, channels, and histories and accurately predict and consistently improve granular Customer Lifetime Value (CLV). CDP’s promise of a unified customer view can help with all these goals. Let’s see how:
Holistic customer personas for improved targeting
A customer persona is a detailed description of a specific customer segment, including demographics, behaviors, interests, and preferences. By creating more accurate and refined customer personas, you can develop targeted marketing campaigns, create personalized experiences, and drive customer lifetime value.
Consider a retailer selling clothing, for example. Using a CDP to consolidate data from various sources, such as website visits, purchase history, and social media behavior, the retailer can create customer personas based on age, gender, and clothing preferences. This enables the retailer to target marketing campaigns towards the most valuable customers with the highest likelihood of purchase.
A CDP delivers precise data on customer and segment demographics, behaviors, and interests to create ads more likely to resonate with specific customer segments. This significantly improves the ROI of your advertising and marketing campaigns and drives revenue growth.
Real-time view of micro-events for always-on optimization
Micro-events are small actions that customers take, such as clicking on a link, watching a video, or liking a post on social media. These actions may seem insignificant on their own, but when analyzed collectively, they can provide valuable insights into customer behavior.
A CDP helps track these micro-events and use them to design hyper-relevant and targeted marketing execution. For example, if a customer is watching videos on your website, you can create a targeted email campaign that suggests related videos or upsells associated products. Or if a customer abandoned the cart, your SMS campaign with an offer can bring them back to complete the purchase. And these are just some examples of how a real-time view of micro-events raises the bar for targeted customer touchpoints.
More robust CX, constantly backed by real, relevant and refreshed customer data
Customer experience (CX) is a crucial differentiator for any business. Customers expect seamless, personalized experiences across every touchpoint, from social media to in-store interactions. With a CDP, you collect and analyze customer data from every touchpoint to create a more personalized and seamless CX.
Suppose a customer contacts your support team with a problem. In that scenario, your support team can use quick insights from the CDP to understand the customer’s history with your brand and provide a more personalized and effective solution. This helps improve customer loyalty and drives repeat business.
2. Laser sharp marketing attribution for better spending decisions
In 2023, businesses are more likely than ever to face economic uncertainty and increased competition. It’s crucial to constantly gauge the effectiveness of your ad and marketing campaigns and make data-driven decisions.
A CDP helps marketers measure the effectiveness of campaigns by providing detailed analytics and attribution data. For example, you can track the ROI of your email marketing campaigns, see which social media platforms drive the most traffic to your website, and analyze the impact of your retargeting campaigns. Having these insights at hand in near real-time ensures that you only spend where it matters, reduce budget waste and ultimately, protect your marketing budgets.
While attribution is not a brand-new concept, CDP provides better value from your attribution framework. For example, many businesses continue to rely on last-click attribution, which gives credit to the last touchpoint before conversion or purchase. But a robust CDP can power multi-touch attribution scenarios, allowing you to measure the impact of ad and marketing interventions across the customer journey.
For example, a Facebook ad led your customer to your ecommerce store. The ad drove awareness, but the customer didn’t complete the purchase on that first visit. The email campaign for this visitor brought the customer back to the ecommerce store, and they completed the purchase. With multi-touch attribution powered by a CDP, you understand the value of each touchpoint – the Facebook ad, the ecommerce store visit, and the email campaign. And you adjust your budgets and strategies around these precise and sharp attribution insights.
3. Cookieless personalization at scale, so your marketing doesn't crumble even if the third-party cookie does
Customer data is crucial for all brand and performance marketing efforts. It adds actionability in insights across customer behavior, preferences, and needs. Ultimately, customer data and insight drive marketing personalization, improve customer experiences, and increase customer loyalty. This is a critical impact, given that nearly every single customer today would rather do business with a brand that understands their triggers and barriers and individualizes their touchpoints and CX.
So far, much of this has happened with the help of third-party cookies. These cookies have allowed marketers to track user behavior online and deliver personalized experiences and targeted advertising. But it’s all about to change.
With increasing user privacy concerns among both consumers and regulators, major browsers like Google Chrome, Mozilla Firefox, and Safari have announced plans to phase out third-party cookies by 2024. It makes 2023 the very last year of cookie-based targeting and personalization efforts.
When the third-party cookie fades away, marketers will need to rely more on first-party data. It’s essentially the opt-in and secure data collected directly from customers, such as email addresses, purchase histories, and website behaviors.
A CDP is an essential element in collecting, orchestrating, and activating this first-party data. Let’s see how.
Insight-obsessed personalization on a massive playing field
In 2023, customers, by default, expect personalized experiences tailored to their needs and preferences. Many studies have reaffirmed that consumers are likelier to do business with companies that offer customized experiences. However, scaling personalization efforts and maintaining quality without third-party cookies can be a challenging endeavor.
A CDP eases this burden. It securely collects and stores customer data from various sources, such as websites, mobile apps, and CRM systems. More importantly, it makes this data usable and accessible for other systems, such as ad channels, marketing automation platforms and analytics tools.
All that’s left is for the marketer to bring human creativity and intelligence to personalization efforts without worrying about the nitty-gritty of data safety, storage and activation.
Personalization on the foundation of micro-events
In addition to collecting and storing customer data, a robust CDP is equipped to analyze customer behavior throughout the buying journey. This includes comprehensive insights on micro-events, such as clicks, scrolls, form submissions, and more. It collectively provides the foundation of personalization at scale for every granular customer.
By tracking micro-events, marketers gain an improved understanding of how customers interact with their brand. They identify opportunities for both personalization and CX improvements.
Ultimately, acting on these opportunities rewards marketers with improved conversions and more substantial marketing ROI.
4. A safe vault for customer data, to protect your revenue and reputation
A 2021 Merkle report found that 76% of customers are comfortable sharing their data if used in compliant ways, leading to personalized experiences.
It’s a tightrope walk, to be sure – balancing personalization with cutomer data privacy. But the centralized nature of a CDP helps. It enables companies to secure and protect customer data throughout the buying journey.
The high-wire act of regulatory compliance to protect bottom lines
Data privacy regulations have become more stringent in recent years. The two most notable and widely known are the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).
Data privacy-related penalties severely impact a business’s reputation and bottom line. For example, some recent customer data privacy-related liabilities on major brands include:
- Facebook: Fined $5 billion by the Federal Trade Commission (FTC) in 2019 for failing to protect user data.
- British Airways: Fined £20 million by the UK Information Commissioner's Office (ICO) in 2020 for failing to protect customer data.
- Marriott International: Fined £18.4 million by the UK ICO in 2020 for failing to protect customer data.
These brands are behemoths among customer-facing businesses. Yet, during a recession, even they can’t afford to be fined such massive amounts because they do not adhere to data privacy regulations.
A CDP lightens the load with in-built tools to ensure data privacy, such as data deletion, access controls, and role-based access. It also ensures that the only data the business has is one for which customers have given explicit, usage-based consent. For sure, your customers will choose to opt-in on data collaboration for personalized CX and experiences.
Earning customer trust starts with data privacy
Your business is only as scalable as the trust that your customers have in you. Customers choose to do business with companies they trust.
A CDP helps businesses earn this trust by ensuring their customer data is protected, stored, and used in fail-proof environments. In addition, it gives customers more control and transparency into how companies use their data.
Ultimately, it all adds up not just to the customer’s trust but also to your brand’s reputation.
The future of integrated martech: Google-powered Customer Data Platform from the house of Acuvate
Trusted by some of the world’s leading customer-facing brands (Unilever, Shell, Reckitt, Diageo, Suntory, Tata Global Beverages, and AbInBev, to name just a few), it was only a matter of time before Acuvate’s data experts invented a marketing CDP for some of the most innovative marketers around the globe.
2023 seemed like a great year to go to market with the Acuvate CDP. For precisely the reasons we mentioned earlier in this article: cookieless personalization at scale and hyper-targeted and measurable marketing spending. What’s more, the Acuvate CDP leverages data directly from Google Analytics platform – a feature our customers absolutely love!
Acuvate CDP is designed to deliver total data streamlining and efficiency across all your marketing channels, enabling you to make informed decisions on your granular campaign and overall marketing strategy.
With Acuvate CDP, you:
Receive data-driven personas with
- Limitless historical and current customer data
- Qualitative customer identities
- Data refresh capabilities for shifting customer needs and priorities
Predict CLV with
- Integration of Google Analytics click-level data with enterprise CRM
- Probabilistic models like BG, NBD, and more
- Deep learning models for accurate CLV predictions
Achieve advanced attribution analysis with
- Rule customization for every attribution model
- Flexible ruleset and Machine Learning
- Integration of multiple data sources to identify and verify attribution patterns
Recognize patterns from micro-event predictions with
- Event Google Analytics data point processing using GCP ML capabilities
- Identification of new behavior patterns and marketing channel-efficiency
- Micro-event to micro-moment journey through advanced BQ analytics
Precise targeting and holistic attribution await with Acuvate’s AI-based Customer Data Platform
With 16+ years of experience in cutting-edge technologies like AI, data analytics, Cloud, Acuvate CDP is the one-stop solution for your customer data management and marketing budget constraints.
An Aberdeen report finds that companies that had invested in a CDP grew nine times compared to companies that didn’t have one. So it’s time to hop on the CDP train with Acuvate and take control of your customer data the way your customers need you to.
Make the most of your data. Create powerful customer journeys. Measure your marketing efforts relentlessly. All with a single platform – Acuvate’s Customer Data Platform.
