The term customer data platform (CDP) refers to a system that collects, merges, unifies and resolves customer data from multiple internal and external sources into one centralized, single source of truth that can then be activated across technologies.

But is this accurate for all CDPs? Are all CDPs created equal?

All marketers want platforms that can transform their data, manage profiles and segment audiences intelligently (based on needs, interests, behaviors, demographics and more). They also want to deliver hyper-personalized experiences in real time. But when shopping for one, they are quickly overwhelmed by the range of platforms on offer. On top of that, marketers are left confused: With no standard set of functions across platforms, it’s hard to pinpoint what exactly a CDP should and can do. That is, until now.

The Truth About CDPs

The fact is that not all customer data platforms are created equal. Their feature sets typically differ from one solution to the other and are less standardized than other types of software. Generally, CDPs fall into four key categories:

  • Data Pipes: a “middleware” layer through which data flows.  These CDPs ingest, unify and centralize customer data, providing a reliable foundation for downstream solutions.
  • Analytics-focused: These CDPs act as “business intelligence” applications that analyze customer data from across the organization to provide insights into customer data.
  • Orchestration-focused: enable orchestration of customer journeys, coordinating and automating data activation. These systems act as “conductors” that choreograph data movement between systems. Orchestration-focused CDPs sit on top of existing technologies that activate the data.
  • Native Activation: Like Orchestration-style CDPs, these also enable the design of complex omnichannel customer journeys. However they also execute marketing campaigns across channels themselves natively, with fewer (if any) additional technologies needed.

In this blog, we’ll explore these four types of CDP, considering: For whom each is best suited, what to look out for, and what buyers should know to make informed platform investment decisions.

Data Pipe CDPs: Customer Data Middleware

“Data Pipe”-style CDPs centralize data from multiple sources into a single, unified “system of record” – offering a single source of truth for customer information. Essentially, they act as a “middleware” layer that centralizes and stores customer data as it moves from one place to another. The primary focus for Data Pipe-CDPs is on long-term data storage, accessibility and reliability to build accurate customer profiles that inform direct marketing strategies and business decisions.

Who Needs Data Pipe CDPs?

Data Pipe CDPs are best suited for enterprise organizations with complex data environments that rely on siloed systems. They would also have technical resources on staff to assist with implementation and ongoing operation. Because Data Pipe CDPs extract and resolve customer data from different systems into single customer profiles, they are handy for companies with legacy systems. They are also helpful for those organizations that have merged with or purchased other companies and want to unify their disparate customer data into a modern, centralized system.

The strength of Data Pipe CDPs lies in their ability to create centralized, reliable and scalable data environments. However, they frequently require technical know-how plus resources to implement. Also, these CDPs typically do not have activation capabilities. They require other platforms for orchestration and execution. Businesses will need to integrate additional platforms to execute marketing campaigns effectively.

Implementation of Data Pipe CDPs

The resources and considerations in implementing Data Pipe CDPs include the following:

  • Data integration expertise: Organizations need resources to set up data pipelines and manage APIs, especially with legacy systems.
  • Data governance and compliance: Buyers must understand privacy regulations (e.g., GDPR), and ensure data security and compliance.
  • Data infrastructure and scalability: Buyers also need adequate storage and processing infrastructure to ensure data availability across systems
  • Cross-departmental coordination: Aligning IT, marketing, and data teams is critical to ensuring smooth data flow and accurate information.
  • Ongoing maintenance: Buyers must perform regular upkeep to ensure the system runs efficiently and the profiles remain updated.
  • Data hygiene: Continuously monitoring and cleaning data to avoid duplication and ensure accuracy is imperative.

Analytics-focused CDPs: Business Intelligence for Customer Data

Analytics-focused CDPs focus on providing insights into the sum of customer interactions, which may entail ingesting data from marketing, sales, customer service and other systems. Analytics-focused CDPs enable businesses to track trends, identify patterns and get insights. Notably, most have dashboard-style interfaces that visualize this data. This feature makes it easier for business users to consume, fueling business intelligence and informing future strategies.

Who Needs Analytics CDPs?

Analytics CDPs are best suited for organizations that are challenged to provide detailed insights into customer behavior and campaign performance – often due to fragmented customer data and multiple platforms. Analytics-focused CDPs benefit businesses that need a holistic view of their customers, enabling data-driven decisions and optimization strategies. Analytics-focused CDPs excel at delivering visualized insights at scale. This competency helps organizations to uncover hidden patterns in customer data, enable deeper audience insights, and improve overall marketing efficiency and effectiveness.

Organizations can reduce waste, increase customer engagement and make informed adjustments as they go. That said, Analytics-focused CDPs do not handle campaign execution or activation. Businesses may need to integrate these platforms with other marketing software for activation, orchestration and campaign management. Organizations would be well suited to ensure they can take action on the insights provided by such solutions and that their chosen Analytics-focused CDP can integrate with existing systems.

Implementation of Analytics CDPs

The resources and considerations in implementing Analytics-focused CDPs include the following:

  • Data integration expertise: Organizations need resources to set up data pipelines and manage APIs, especially legacy systems.
  • Data governance and compliance: Buyers must understand privacy regulations (e.g., GDPR) and ensure data security and compliance.
  • Data infrastructure and scalability: Buyers also need adequate storage and processing infrastructure to ensure data availability across systems
  • Data management expertise: Teams skilled in data management to implement the insights proposerd by such systems.

Orchestration CDPs: Customer Journey Creation Across Technologies

Platform-agnostic Orchestration CDPs enable the creation and activation of customer segments across systems. Like the other CDPs above, they ingest customer data from across platforms. Unlike Data Pipeline CDPs and Analytics-focused CDPs, however, they enable both the segmentation and activation of these audiences.

Orchestration CDPs are focused on creating “Customer Journeys” – coordinated omnichannel marketing programs – that enable messaging to customers based on audience criteria or their interactions with the brand. These customer journeys are choreographed across an organization’s existing marketing technologies – hence the term “platform agnostic.” Additionally, because these platforms can unify customer data, they enable message personalization across these channels.

Who Needs Orchestration CDPs?

Platform-agnostic Orchestration CDPs are best suited for businesses that have heavily invested in existing marketing technologies and want to coordinate complex, omnichannel journeys across these technologies. Such organizations may even plan to upgrade their technologies and preserve their existing marketing programs. Such organizations likely combine marketing and advertising messaging as part of an integrated “path-to-purchase” and initiative to personalize messaging across channels.

The strengths of Platform-agnostic CDPs are their flexibility in terms of integration options and ability to create seamless cross-channel engagement, while providing vendor independence. Platform-agnostic Orchestration CDPs are also adaptable and scalable, making them ideal for enterprise organizations.

However, Orchestration CDPs rely on external systems to manage the full orchestration of direct marketing campaigns, including messaging across channels. These systems can pose a challenge to integration and operation as they may have limited support to troubleshoot integrations – or to ensure data security and compliance.

Implementation of Orchestration CDPs

The resources and considerations in implementing Orchestration CDPs include the following:

  • Integration expertise: Organizations need to be able to synchronize data sources and destinations to coordinate campaigns across multiple technologies and platforms, and vendor support may be limited.
  • Customer journey mapping: Once implemented, expertise in mapping complex customer journeys is also needed.
  • Data security and compliance: Ensuring compliance with privacy regulations while managing and reporting on large volumes of customer data.

Native Activation CDPs: Integrated Customer Journeys

In contrast with Platform-agnostic CDPs, which need other platform integrations for content delivery, Native Activation CDPs can execute campaigns directly without relying on external systems. For example, with Native Activation CDPs, you don’t need separate, disconnected platforms (such as those for email or SMS).

Who Needs Native Activation CDPs?

Native Activation CDPs are highly suitable for organizations with smaller marketing teams, limited technical resources for integration, and fewer staff members familiar with data security and compliance. Such organizations may be best served by a single solution that enables efficient marketing campaigns across multiple channels.

CDPs with native activation excel at providing a streamlined, integrated approach to data collection, segmentation and campaign execution. They typically offer A/B testing capabilities with dynamic content, allowing businesses to refine their messaging strategies before full-scale campaign launches. Some CDPs provide real-time native activation based on behavior-based triggers to automate lifecycle programs.

However, Native Activation CDPs may not offer the advanced features or flexibility some businesses require, particularly those with more complex needs or those already using best-in-class systems for specific marketing functions. Once locked into a DCP with native activation, organizations may find they lack the third-party integrations needed for the full range of features or flexibility provided by specialized external platforms.

Implementation of Native Activation CDPs

Of all CDP types, implementing Native Activation CDPs is the least resource-intensive. They typically require the fewest technical resources for integrations and data governance and the most opportunities for marketing efficiency. That said, teams will need:

  • Omnichannel marketing expertise: Buyers must understand how to orchestrate omnichannel marketing campaigns successfully, from designing marketing programs to creating and optimizing key performance indicators (KPIs) that measure success.
  • Team training and change management: Organizations will also need resources to develop internal training materials and coordinate staff training to ensure they are fully prepared to operate their chosen platform.

Which CDP is for You?

It’s essential to consider which type of CDP you require – Data Pipes, Analytics-focused, Orchestration-focused or Native Activation – or if you would benefit from more than one. While each CDP type could play a role in your technology stack, investing in multiple solutions can have advantages. However, achieving this investment requires strategic financial planning, as investing in multiple standalone platforms can escalate costs quickly.

Experiture: Helping Maximize Your CDP Investments

Experiture offers a cost-effective, scalable solution that can work alongside your marketing investments if you’re considering the financial implications of investing in multiple CDPs. Experiture offers native execution and robust integration to help marketers act on customer data. Featuring a no-code, easy-to-use interface, Experiture can be easily implemented and operated by small marketing teams looking for enterprise marketing capabilities. Such an approach may empower some businesses to unlock the full potential of their customer data, ensuring they can deliver relevant, timely and impactful experiences at scale.

Have questions about CDPs? Get in touch with Experiture Today and speak with a product expert.