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How To Navigate the Future of the CDP


Jun 16, 2023 #CDP, #Future, #navigate

The future of customer data platforms (CDPs) is becoming increasingly important as businesses strive to make sense of their data and use it to drive growth. Carly French, Senior Director, marketing technology consultant of Merkle, discusses how CDPs by leveraging data, businesses can stay ahead of the curve and deliver the relevant and personalized experiences customers expect in today’s digital world.

As technology progresses, companies explore fresh approaches to interpret and employ their data to fuel progress. One solution that has gained traction is using customer data platforms (CDPs). These platforms allow companies to merge and scrutinize data from various sources, establishing actionable customer profiles. As CDPs proliferate, it’s natural to wonder about their future. Will they continue to serve as a specialized tool for data-driven firms, or will they become a standard in every marketer’s arsenal? What innovative features and functionalities can we expect to see in the years ahead?

It’s crucial for anyone involved in marketing, data analysis, or business ownership to be up-to-date on the future of CDPs to remain competitive and fully unleash the power of their data. Today’s consumers demand relevant and tailored experiences, and businesses delivering these experiences will hold a significant advantage. While data alone doesn’t ensure marketing success, the ability to transform that data into actionable insights distinguishes the CDP.

Advanced Integrations and Connected Data

CDPs are evolving beyond their traditional use cases in marketing to become the backbone of connected data ecosystems that enable effortless integration and management of data across a range of platforms, such as CRMs, social media, data warehouses, analytics, and more. As consumers adopt new devices and technologies, the number of data touchpoints multiplies, and CDPs are keeping pace with this growth. They are highly adaptable and continually broadening their native integrations to include cutting-edge, emerging technologies such as chatbots, voice assistants, blockchain, and Internet of Things (IoT) devices.

Better Activation Capabilities

While data collection across channels has traditionally been the primary focus of CDPs, activation is now becoming just as crucial. Marketers want to use the data they gather to create contextualized experiences for customers across various channels and touchpoints. To develop coordinated experiences at scale, a CDP must work collaboratively with all critical platforms. A well-integrated CDP forms connections with platforms that enable timely decision-making without any gaps in information. To address this need, CDPs are now integrating activation capabilities into their platforms, enabling a smooth flow of data-driven activities from audience segmentation and targeting to real-time decision-making and optimization. By bringing the activation layer closer to the data, marketers can achieve faster time-to-value and attain real-time optimization in the moment of interaction, which is what most organizations aim to accomplish.

Artificial Intelligence (AI) and Machine Learning (ML)

AI/ML are not new features for CDPs, but they’re now being leveraged more innovatively. As generative AI tools like ChatGPT and Dall-E-2 have taken the market by storm, CDPs are also ramping up their algorithmic capabilities. AI/ML can process and react to mass volumes of complex data at a speed and scale that humans cannot match. Within CDPs, AI/ML can help identify patterns in customer behavior, personalize marketing messages, create sales content, provide human-like customer service, and automate critical business tasks like advanced analytics. With the speed and scale of AI-powered marketing activities, CDPs are evolving in ways that save companies time and resources. 

See More: How to Get Your CDP to Work with Your MarTech Stack

Composable and Hybrid CDPs

Flexibility and agility are core benefits of these technologies. Composable or bundled CDPs, a new flavor of CDPs, offer more flexibility in terms of customization and allow for greater control over data management and activation. While bundled CDPs may have some limitations, the biggest risk is that they become another data silo within an organization. Composable or Hybrid CDPs focus on leveraging an organization’s centralized cloud data warehouse and then building segmentation, enrichment, and streamlined activation on top. Many organizations find this architecture approach appealing because it supports their single source of truth goals within the cloud database while still providing marketers access to data to create better customer experiences. This approach, or a hybrid architecture, will become the new standard for most CDPs.

Data Privacy and Security Compliance

Given the growing importance of data privacy regulations, safeguarding customer data is a top priority for businesses. CDPs are taking a privacy-first approach and implementing features like data governance and consent management to address this. By prioritizing privacy, businesses can ensure that they’re collecting and using customer data ethically and sustainably, which is crucial for maintaining trust and building long-term customer relationships.

Where To Start To Stay Ahead of the Curve

  • Start with a clear strategy. Build a robust strategy that aligns with business goals and objectives. 
  • Choose the right vendor. Focus on what capabilities are lacking in your current ecosystem that a CDP will fill. Then have a collaborative session with marketing and IT (or with Merkle!) to understand the best architecture needs for your stack that can help narrow down the vendor list. 
  • Prioritize data quality. As the saying goes, “good data in, good data out. Bad data in, bad data out.” CDPs rely on high-quality data to deliver personalized experiences. Ensure your data and identifiers are structured, normalized, and business ready. 
  • Determine your MVP. Start small and actionable. Show value right out of implementation to increase user adoption and encourage the organization to think of the CDP as a key system for marketing planning. 
  • Get your teams aligned. Ensure that your organization is ready to take on a transformative tool like a CDP, that shatters team silos and forces email, website, media etc. to all think about the customer experience vs. a channel experience. 
  • Leverage AI and ML. Leverage AI and ML to enable hyper-personalization at scale, automate tasks, and gain deeper insights into customer behavior.
  • Adapt and iterate. As with any marketing tool, it’s important to continuously monitor and optimize your CDP strategy. The true value of a CDP comes from the insights it provides. Use the data collected by your CDP to make informed decisions, regularly review your data, and adjust as needed. 

As the digital landscape continues to evolve, CDPs adapt to stay relevant and offer more advanced features such as AI/ML capabilities, composable architecture, and a privacy-first approach to data management. While they require a certain level of technical expertise and strategic investment to set up properly, they offer a scalable solution in the long term that can save companies time and resources. Because of this, CDPs are becoming an essential component of every marketer’s toolkit. By leveraging the power of data, businesses can stay ahead of the curve and deliver the relevant and personalized experiences that customers expect in today’s digital world.

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