Move over DMP, DSP and SSP: CDP is ad tech’s hot new acronym
If demand-side and supply-side platforms have found that venture capital funding is running dry, the reverse is true for customer data platforms, which tech executives and investors see as customer-relationship management platforms for business-to-consumer marketers. CDPs have gained momentum lately because they promise to offer a single view of a consumer across multiple devices, mainly based on a brand’s first-party data.
Much venture capital money is going into CDPs. For instance, Bluecore raised $35 million in series C funding last October, and mParticle raised the same amount last September, while Segment raised $64 million in series C funding last July.
Although the CDP market is being defined, John Matthews, managing director for Oaklins DeSilva+Phillips who advises on company exits, thinks CDPs will likely become acquisition targets for ad tech companies this year to underpin their targeting capabilities with richer and more unified targeting data, given the convergence of ad tech and marketing tech, with crossover merger and acquisition activities already taking place. “Overall, this moves ad tech companies toward being more CRM-focused for marketers,” said Matthews.
Eric Franchi, an early investor in mParticle, also said CDPs are hot right now and have “tremendous upside,” so they could grow into their own market. He doesn’t categorize CDPs as ad tech companies.
But as DMPs and CRM software evolve, they can do many things that CDPs claim to do. For instance, major DMPs that traditionally rely on third-party data have started processing first-party and second-party data, according to Matt Skinner, product marketing manager for DMP Adobe Audience Manager. “CDPs are an interesting emerging area. They talk about including PII [personally identifiable information] into their first-party data, which DMPs don’t do. But there’s lots of overlap in what CDPs, CRMs and DMPs can facilitate,” said Skinner. “I think CDP will be a big buzzword in 2018.”
Meanwhile, Matthews, who was a CRM industry analyst and consultant for 15 years, believes CDPs are just hybrids of DMPs and CRM platforms that incorporate online advertising data to enable some form of real-time analytics and targeting, across multiple offline and online channels. “[The rise of CDPs] also ties into the increasingly talked-about idea of people-based marketing, as in people as customers or prospective customers,” said Matthews.
Franchi also thinks CDPs are becoming the new darling in the investment community because consumer experience is fragmented across mobile, desktop and Amazon Alexa, among other devices, and CDPs can help marketers fill the gaps. “It’s time for CDPs to power marketing the way marketers want,” said Franchi. “DMPs are becoming less and less effective with cookies under GDPR, and there are more opportunities for CDPs to connect consumers across devices.”
But Matthews believes the challenge with CDPs — in addition to regulation and privacy issues — is managing customer data at high volume, regardless of whether a brand has allowed a CDP to mix its first-party data with other data sources. There’s also the question of whether brands are even willing to provide access to their first-party customer data in the first place, he said.
“There’s lots of value in using a brand’s first-party data, and I’m very supportive of that. But sometimes the industry tries to put different names on the same stuff,” said Jeffrey Finch, co-founder and chief product officer for DSP Choozle. “For me, CDPs and CRM companies are the same thing. If you try to raise money, it’s smart of you to put a new name on it.”
More in Marketing
TikTok has officially launched its new e-commerce platform, TikTok Shop, earlier this month on August 1. Using the new e-commerce platform, brands and creators can sell products directly on the platform, potentially creating new revenue streams, and tap into the short-form video platform’s growing popularity.
‘The influencer industry can be really vile’: Confessions of an influencer marketer on the industry’s unfair hiring practices
While the influencer industry might sound exciting and like it’s full of opportunities, one marketer can vouch for the horrific scenarios that still take place behind the scenes.
After a tumultuous 12 months, marketers are getting a clear picture of how they really did during a time of true uncertainty. And, as it turns out, it wasn’t all that bad.
Ad position: web_bfu