Many marketers looking for a single view of their customers have been turning to customer data platforms (CDPs), a sector that the CDP Institute’s latest report (free, registration required) said is enjoying robust growth and evolving with new capabilities.

Steady growth in CDP sector. The semi-annual study, the Institute’s fifth, found a growth rate of 23 percent over the last six months across employment, vendors and funding. That reflects an increase of 15 new vendors, 1,256 new employees and additional funding of $317 million.

Institute head David Raab said via email that “more new companies [were] founded recently and designed from the start as CDPs,” compared to older companies that were founded “as something else and switched.” The newer crop of startups are smaller, less funded and distributed across the categories of access, analytics and campaign management.

Total 2018 revenue across 78 CDP vendors reached $740 million, according to the report. It projects the sector will reach $1 billion this year.

Acquisitions, platform evolution. While there is little sign yet of consolidation in this sector, the report points to what it called “the first two major CDP acquisitions” in the last half of 2018.

In July, Salesforce bought marketing analytics platform Datorama. It doesn’t meet the literal definition of a CDP — it doesn’t do identity resolution, for instance — but Raab believes it is evolving toward one. In August, ARM Holdings, which owns ARM semiconductors, bought CDP Treasure Data as part of its announced intention to become a bigger player in the Internet of Things space.

Although it insists it is not providing a CDP, Salesforce is beginning to provide a more centralized, golden master of customer data, such as with its Customer 360 launch for B2C in September. In October, Oracle said it is launching a “CDP-plus,” and a coalition that includes Adobe, Microsoft and SAP announced an Open Data Initiative to provide a complete view of customer experiences in real-time.

Definition and trends. The Institute defines CDPs as “packaged software that creates a persistent, unified customer database that is accessible to other systems.” For marketers, the CDP idea is manifesting inside other platforms and initiatives, providing many options and moving toward some best practices for how centralized customer data should be handled.

By contrast, other customer data-handling tools like Customer Relationship Management systems work with their own data, store it for limited periods and include third-party data (like Data Management Platforms), or interact directly with customers, like web content management.

One clear trend, according to the report, is a long-term shift away from data access-only CDPs, whose job is primarily to acquire, resolve and manage customer data from every available resource. Those types of CDPs dropped to 26 percent of the surveyed companies’ employment share in the past six months, from 53 percent at the end of 2016, although access vendors are still the largest and best funded.

From the CDP Institute report

Analysis-oriented CDPs include data access, and they have continued to represent between one-fifth and one-quarter of the sector’s employment share since the reports started in late 2016. But CDPs offering campaign tools, which also include both access and analysis, have grown the most since 2016, now representing 49 percent, compared to 24 percent two years ago.

Why you should care. The basic takeaway of the new report, Raab said, is that this is “still a young and dynamic industry, testing a lot of different niche approaches without any one dominant model emerging.”

For marketers, the sector’s dynamism means that efforts to maintain a golden record of customer data from all sources can be implemented in many different standalone tools or in various components of existing platforms.

The growth of CDPs with campaign tools, for instance, indicates that marketers will increasingly have the option of managing campaigns alongside a centralized, CDP-like data repository that can be used by other tools.

This story first appeared on MarTech Today. For more on marketing technology, click here.


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