Martech Starter Kit
Customer Data Platform

Customer Data Platform — Defined

By Hannah Whalen | 2.23.18

Marketers on a never-ending quest for the Holy Grail of a holistic customer view may find that a customer data platform (CDP) will propel them along their journey. But with so many options available for managing customer data, marketers may need clarity on whether a CPD is right for their business and, if so, how they can use a CDP to help them reach that lofty goal.

Table of Contents

What it is. more...

What it isn’t. more...

What marketing business problems does a CDP help tackle? more...

What opportunities does it help marketers take advantage of? more...

What are the main challenges or drawbacks? more...

What size company is it primarily intended for? more...

Which marketing discipline is it primarily intended for? more...

What’s the projected time to ROI? more...

What are typical results? more...

What does it take to add this product to a marketing organization’s
   existing tech stack? more...

Some of the vendors that serve this space. more...


What it is:


Coined in 2013, the term customer data platform didn’t gain momentum until the end of 2015. In 2016, Gartner placed CDP on its hype cycle at the innovation trigger point. Today, discussions on CDPs saturate the marketplace, yet there’s still little consensus on what does and doesn’t fit the category.


“The market is so immature that the it hasn’t settled on a definition [for] a CDP,” says Gartner analyst Christi Eubanks.

Simply put: A CDP is a marketer-managed system that creates a unified, persistent customer database from many channels that is accessible to other systems in the marketing stack, according to David Raab, founder of the CDP Institute. The CDP’s purpose is to perform identity resolution in near real time.


Raab explains that there are three primary elements that define a CDP:

  • Marketer control: Marketers oversee the purchase and implementation of a CDP in collaboration with IT; it’s not a custom IT project.

  • Unified and persistent: A CDP is a database that builds a single customer view using data from as many channels as possible, stores the data so marketers can use it for time-based analytics, and links to the most current customer IDs as they change over time.

  • Accessible to other systems: Marketers use the data housed in the CDP beyond its own applications.

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What it isn’t:


It’s not a data management platform: CDPs are too often compared with DMPs. Don’t do it — the two are apples and oranges. Both CDPs and DMPs build and share customer profiles, but CDPs are constructed for first-party personally identifiable information (PII), and DMPs are built around anonymous, cookie-based third-party data. Additionally, DMPs lack the detail, speed, and ability of a CDP to perform identity resolution across all data in real time.

It’s not a data mart or data warehouse: These tools summarize data for reporting purposes, but lack the detail and speed to personalize engagements in near real time or to isolate a single customer profile.

Nor is it a marketing cloud or campaign management system: These tools connect to data warehouses without creating or managing persistent keys and lack the ability to link, process, cleanse, or match data.

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What marketing business problems does a CDP help tackle?


IT’s failure to meet marketers’ database needs
Marketers often struggle to find the specific data they need when they need it because IT “owns their destiny,” says ActionIQ CEO Marc Parrish. “The chances that you would get a world-class IT organization specifically oriented towards databases that would serve marketers…are nil,” Parrish says.


Fragmentation and data silo proliferation
Businesses have created data silos around their customer engagement channels (e.g., email, call centers, and social networks). This data lives in disparate internal systems, so optimizing engagement across the enterprise is difficult and leads to subpar customer experiences. “Depending on who a customer contacts, [a company is] going to have a different view of that customer,” says RedPoint Global CEO Dale Renner. Siloed activity creates fragmentation, which prevents companies from forging meaningful experiences for their customers. By collecting all customer data from many channels into one system, CDP promotes more effective engagement and personalization.


Fragmentation leads to latency — the enemy of the marketer. Silos and the resulting fragmented data lengthens the time required to draw significant conclusions. Latency, in turn, causes fragmented profits. By compiling all the fragmented data, CDP cuts processing time and reduces latency.


Cost of data storage over time
Though cheaper than ever before, data storage is still a considerable business cost — especially for enterprise firms housing behavioral data — often forcing them to limit how long they retain that data. But CDP data is persistent, storing data over time so marketers can use it for time-based analytics, such as uncovering trends, and to link customer IDs as they change over time.

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What opportunities does it help marketers take advantage of?


Better understand customers
Marketers can use a CDP to gain a deeper understanding of their customers across a growing number of touchpoints, channels, and devices by unifying all of the relevant customer data into one view — capturing a customer’s entire journey and relationship with a brand, rather than who they are as a cookie at one point in time on a website.

Meet customer expectations for personalization
A CDP provides marketers with the ability to generate microsegments. Additionally, marketers can use it to performs identity resolution across channels, as well as improve personalization and consistency. This helps marketers meets customers’ expectation to be recognized and treated consistently across all channels, taking into account all previous interactions.


Activate first-party data
A CDP allows marketers to effectively organize and activate their most valuable asset: first-party data — the richest source of customer insight into customers. CDPs are built to organize first-party data and to reconcile information across first-, second-, and third-party data sources into a single view.

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What are the main challenges or drawbacks?


Understanding the CDP

Many marketers still don’t understand the CDP’s capabilities or mistake it for other systems, such as a DMP—in part because some DMP vendors pitch them as CDPs. Some marketers don’t even realize that CPDs exist. Gartner’s Eubanks often encounters clients who “say things like, ‘Well, we didn’t really know what we were looking for. We didn’t know if it existed.’”


Strategy and preparation

As with all marketing technologies, a CDP is meant to enable or support a marketing strategy. Challenges arise when marketers don’t have a specific use case or specific goals in place before implementing a CDP. They also need a strategy to measure the success of the implementation and the ROI of the software investment.


Organizational and process changes
 A CDP requires rethinking entrenched processes and systems. “The mechanics of doing this is not the hard part,” says RedPoint’s Renner. “All the organizational and cultural and measurement things around it are the hard parts.” Updating incentive systems, measurement systems, management systems, and the entrenched processes related to each may present roadblocks to getting the most from a CDP.


Increased marketing speed

Keeping up with a CDP’s faster pace of information output requires marketers to learn to hasten their own speed. For example, they’ll need to create new campaigns more quickly to respond to the real-time insight a CDP provides.


Existing data setup

Of course, CDPs have limitations based on an organization’s specific approach to data storage. Companies that have separate data marts, for example, may find that CDPs aren’t an ideal solution.

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What size company is it primarily intended for?

Several industry experts maintain that businesses using CDPs tend to be medium to large consumer-oriented companies (i.e., at least $100 million revenue) that use multiple interaction channels. However, even smaller organizations with small data sets could benefit from a CDP—it’s simply a matter of investment.


More important than revenue is marketing spend, says Bruce Biegel, senior managing partner at Winterberry Group. “A company that has several million to the low tens of millions in revenue can benefit from a CPD,” he asserts. “Companies need to spend enough on marketing to make this worthwhile. You could be a billion-dollar business but not spend much on marketing.”


Choosing to use a CDP may also correlate with marketing maturity. According to RedPoint Global’s Renner, on a capability/maturity model scored 1-10, businesses that use a CDP tend to be a 7 or higher.


“A CDP can be a viable alternative if you don’t have the budget or need for a full enterprise data warehouse, if you’re doing primarily digital databases, or if you need an appliance and don’t have the right resources,” Biegel says. “CDPs are probably the right place to be for a company that has a database plus campaign management plus personalization tools and is looking to spend six figures. A CDP is like a system on training wheels because it’s a prebuilt environment. The more mature the organization and analytics folks, the more they’re going to want from their data, so the more they’ll want custom tools instead

of a CDP.”

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Which marketing discipline is it primarily intended for?

A CDP is cross-channel, so it’s appropriate for all marketing disciplines. CDPs promise to orchestrate a multichannel experience for consumers based on their individual unified profile from interactions across all the channels they use. Social, however, is currently less of a priority for CDPs; the focus today is mostly on email, mobile messaging, and web personalization.    back to top


What’s the projected time to ROI?

The return on investment in a CDP varies widely from weeks to a quarter, but typically is less than one year. The variation is based on how personalized customer engagements were before implementing the CDP, as well as how strategically prepared a business is for implementation.

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What are typical results?

Results are limited only by the marketer’s imagination, experts say, but typically include improved operational efficiency and improved marketing ROI. A CDP should pay for itself either in marketing and media savings or by eliminating point solutions with overlapping capabilities.


According to Gartner’s Eubanks, some companies saw a 90% decrease in time to execute a campaign using a CDP. For instance, a lead scoring process that would take five minutes to run on an old internal system might take a fraction of a second on a CDP. Additionally, rather than managing, say, three or four core customer segments, using a CDP, marketers can dynamically manage upwards of, say, 50 microsegments.


A CDP may reduce time to value and improve ROI; a 10 to 20 percent revenue lift is common, according to Eubanks. Consider retailer Lululemon as an example. After implementing a CDP to improve personalization, attendance at its in-store promotional events increased by 25 percent and its website visits increased by 50 percent. One insurance company Eubanks cites as another example saw a 50 percent rise in renewals and a 13 percent increase for one specific holiday campaign.

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What does it take to add this product to a marketing organization’s existing tech stack?


  • Estimated implementation timeframe: It varies from two to six months.

  • Integrations: The CDP should connect with all other marketing systems, including data sources and execution systems. This enables it to pull and push data from the existing marketing tech stack and integrate data from any relevant internal or external source. But not every CDP is able to ingest any type of data source. Gartner’s Eubanks acknowledges that, although all of them handle digital marketing data well, only some can ingest data from offline purchases or internal database, and only a few can integrate data from connected devices.

  • Dedicated administrator? Yes

  • Typical users: Marketers, specifically digital marketers, are the primary users—but data analysts and data scientists often access the CDP indirectly or through BI tools.

  • Typical number of users: It depends on the types of data stored and the functionality of the specific CDP. Typically, no more than 5 percent to 10 percent of the total marketing team use it to directly access PII, according to Ru Barry, head of product strategy at Boxever; roughly half of the team will use it for segmentation, and closer to 70 percent to 90 percent will access it for insights derived from the PII without access to specific details about individual customers. Most will indirectly interact with and leverage the system and may not log in every day. 

  • Amount of initial training for users: Assuming users are beginning with a data mind-set, about three to five days. Becoming an expert CDP user requires not only more time, but also mind-set and process changes, such as those noted earlier regarding speed.

  • Data sources: The CDP consumes data in real time from all channels relevant to the marketing strategy it supports; for example, mobile, web, contact centers, and customer responses to marketing promotions. CDPs are designed to capture behavioral data and ingest and process PII, as well as other relevant data. Companies usually start with core data sources and add more over time.

  • Notable process changes: The CDP fundamentally changes how marketing is done. Marketers will need to take into account the more comprehensive data views and cooperate more across channel-focused teams. Using a CPD should allow a siloed marketing team to transform into an agile multichannel team that creates omnichannel experiences for customers.

  • Who “owns” it over time? Generally, marketing departments own and operate the CDP with help from the vendor or
    internal IT. Today, some marketing departments have their own martech team that will oversee the CDP. “You’ll need IT, or marketing IT, to integrate your data sources,” Winterberry Group’s Biegel advises. “Some marketing manager is not setting this up by himself.”

  • How often should you consider a complete upgrade or replacement? Because CDPs are stable, a company can replace or upgrade other systems without making changes to the CDP. That said, all businesses should reevaluate their tools every year or two. CDPs are highly adaptable by design, so marketers can upgrade or replace them less often. Biegel recommends a more frequent review. “The rate of change on the app site is every six months,” he says. “You don’t want to be stuck with an application that doesn’t suit your current needs.”

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Some of the vendors that serve this space:

ActionIQ                  AgilOne                     Amperity

BlueConic               Boxever                     Ensighted

Evergage                 Lytics                          mPartical

NectarOM              NG*DATA                   Optimove

Quaero                   RedPoint Global       Reltio

SessionM               Tealium                      ZenIQ


View more vendors at

> The 2017 Chief Martech Marketing Technology Landscape Supergraphic

> CPD Institute’s Directory

>G2 Crowd on CDPs 


About the Author

MKTGinsight contributing writer Hannah Whalen is a journalist and editor who has an affinity for politics, digital marketing, and all things media. She is a Macaulay Scholar and recipient of the Bella Abzug Leadership Institute’s Excellence in Civic Engagement Award. Hannah currently writes for spoiledNYC and contributes to several online publications.

Find her on LinkedIn and at @hannahawhalen.