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Guest article: Do you need a Customer Data Platform?

The CDP, or Customer Data Platformsare the talk of the town at the moment. Is this another trendy acronym in the Martech world? Perhaps, but this acronym nevertheless reveals a profound evolution in the CRM world. CRM software is less and less used to centralize customer data. More and more people prefer to separate the marketing database from the CRM tools. This may seem surprising, but if we go back to the definition, a CRM software is made to manage the "Customer Relationship". This relationship takes on a different meaning depending on the target or the channels considered. We often find ourselves with several "CRM" tools, one more B2B oriented, the other more B2C, one oriented on emails, and the other on mobile notifications, etc.

The consulting firm Cartelis has conducted a comprehensive study on Customer Data Platforms. Here are the first slides of the study. To download the complete study, we invite you to visit the next page.

Source: Cartelis - Data Marketing Consulting

At the origin of CDP, the evolution of CRM architectures

In the age of Big Data marketing, the modern CRM architecture is evolving. CRM software no longer necessarily plays the role of marketing database. Many companies are now choosing to distinguish between the marketing database on the one hand, and the activation and monitoring of the customer relationship on the other. The marketing database centralizes the customer data, it is the guarantor of the famous 360° customer view, and it is this marketing database that feeds the various marketing / CRM tools that need customer data. In many companies, we have a "commercial" CRM tool like Salesforce and a marketing CRM tool like Cabestan, Selligent or Adobe, and the marketing database is really the keystone of the system.

Until now, marketing databases were often custom projects, but things are changing at full speed. The emergence of Data Management Platforms (DMPs) has helped structure this fast-growing market. Advertisers started to equip themselves with DMPs with the initial objective of improving their media performance. DMPs were increasingly used as marketing databases, or as a behavioral database to feed a complete marketing database, which was referred to as "customer-centric DMP" as opposed to "media DMP".

These are the DMPs customer centric which are now called Customer Data Platforms. The difference between DMP and CDP is not always clear, but you can remember:

  • The CDP allows the storage and centralization of all the company's customer data for marketing and CRM purposes, while the DMP is mainly used for advertising retargeting purposes and is based on the use of anonymous data reconciled around cookies. Its operation consists in gathering web visitors into audience segments and transmitting these segments to media activation tools (DSP / SSP).
  • CDPs are mainly based on First Party data, possibly enriched with Third Party data (web browsing behavior), whereas DMPs mainly use Third Party data to create anonymous audience segments.

Why set up a CDP or marketing database?

Many companies today choose to build a marketing database separate from their CRM. There are many reasons for this:

  • The activation of the customer relationship implies more and more different tools (chatbot, email automation, web personalization, ..) and all these tools need to be synchronized with a database that has to play the role of main repository.
  • Marketing databases need to combine behavioral data (website visits, mobile application events, etc.) and transactional data. This implies a technological paradigm shift that CRM publishers are often still struggling to adapt to quickly.
  • BI teams have data needs that are often similar to those of marketing teams, especially in terms of behavioral aggregates. Setting up a marketing database can help build a common database.

If you start to consider a CDP, keep in mind that these are expensive solutions. You need to count at least 30k€ per year for the license, and the project management cost during the implementation is not negligible.

The main alternative to CDP is to build a cloud marketing database. When considering this type of architecture, the most important thing is not the data storage, any cloud datawarehouse can do the job, it's the piping. The major challenge is to reduce the cost of setting up and maintaining the preparation and flow of data. To do this, you need to choose a solution that can play the role of ETL from the start (Extract, Transform, Load). Amazon and Google offer services to play this role, AWS Glue or Kinesis in the Amazon ecosystem, and Google DataPrep / DataFlow in the Google ecosystem, but you can also choose an independent solution like Dataiku, Alooma or Xplenty.

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