Customer Data Platforms (CDPs) has risen to prominence as modern analytics solutions, providing a central hub for the numerous “spokes” of data stretching across the enterprise. CDPs enable true digital experience optimization by connecting to a variety of destinations and offering consistency and uniform message across all customer touchpoints, and they are still evolving.
According to the Customer Data Platform Industry Accelerated During Pandemic: CDP Institute Report, customer data platform (CDP) suppliers expanded at an all-time high in the first half of 2021. Companies invested in CDPs to support pandemic-inspired transformation projects, according to the semi-annual study, which indicated that a brief pause at the outset of the COVID-19 pandemic was replaced by accelerated expansion, greater funding, and strategic acquisitions.
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So, what does the future hold for customer data platform companies?
The focus of CDPs will shift back to data privacy concerns
The drop in data privacy compliance reported by vendors is one of the most interesting results from the CDP Institute’s latest member report. In 2020, 12% of respondents indicated they are aware of privacy requirements but only take a few efforts to comply. Meanwhile, 2% of respondents admitted to making little effort to understand or follow privacy laws.
These figures had risen by the time the study was conducted again in 2021. Now, 11% say they pay attention but put in little effort, while 4% say they put in little effort to understand or comply. B2B products and services, as well as corporations operating in the Americas, were the worst offenders in both categories.
In the turmoil of a global pandemic, these types of initiatives may have gone unnoticed. Privacy compliance is likely to rise back up the priority list as regulators find their footing in the next year and things calm down for businesses.
The number of acquisition alternatives grows
Even if a few resource-rich enterprises develop CDP alternatives, the number of vendors selling bundled CDPs will continue to rise. These businesses add a CDP to their products to make them more enticing to present and new customers while also preventing competitors from obtaining a foothold.
Specialized data models, prebuilt interfaces to common industry systems, standard features targeted to industry use cases, and employees who are industry specialists distinguish industry-specific CDPs from general-purpose competitors. Many of these businesses may not consider themselves CDP vendors because the CDP is only a minor portion of their overall offering.
Businesses will also see a trend of general-purpose CDPs incorporating industry-specific packages with a similar set of pre-built connectors, functionalities, data models, and specialist employees. As the largest general-purpose CDP providers gain experience with pilot clients in every new industry, this number will rise.
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Segment identification using automated machine learning
The issues of machine learning (ML) build-out and integration are intrinsically addressed by CDPs, resulting in a well-curated data source. This enables actual machine learning in an often automated style, with relatively few in-house ML engineers required. More and more technologies with this capability appear on the market on a regular basis.
Automatic activation
The best ideas are worthless if they are not put into practice. Many CDPs already offer functionality that sends users to marketing or personalization channels when they are assigned to a segment. Many more intricate procedures are now conceivable.
