There are multiple reasons to buy an off the shelf customer data platform, but also reasons why it might not be appropriate for your particular business. There are alternative to purchasing a customer data platform that might end up being more relevant for your particular business needs.

When to buy an off the shelf CDP

There are a lot of valid reasons to leverage off the shelf customer data platforms, from the quicker time to market, their ability to connect online and offline identities or their easy setup.

Time to market

A Customer data platform allows you to leverage a higher time to market than doing self development or relying on different third party toolings that would each cover a part of the functionalities of a CDP.

Off the shelf CDPs, typically come built-in with a myriad of integrations, integrations to the digital marketing ecosystem (Google Marketing Platform, Facebook, DMPs..), CRM, data-warehouses … Choosing to develop these capabilities yourself or rely on different third party toolings would require a higher development effort and require time for somethings that only need to configured within a CDP.

Connecting online and offline Identities

Customer data platforms have algorithms that can easily connect online and offline identities. Setting up the same types of connections would require an extensive infrastructure setup to be able to ingest clickstream data and match them to offline personas. Furthermore being able to merge the data coming from online and offline data will require some customer master data management, the capabilities of off-the shelf CDPs are however not fully matching those of full fledge MDMs.

Low on engineering resources

Off the shelf CDPs, are relatively easily to setup. They typically offer FTP/CSV files importers, and their front-end tag setup can be done with the help of an analytics agency. Most CDPs have integrations with Google Marketing Platforms, Facebook as well as email marketing automation platforms such as Mailchimp, Sendgrid or Salesforce Marketing Cloud and can allow an engineering light company to leverage their different integrations without or without too much engineering resources.

No custom requirements

Going for off the shelf CDPs, can be great when you are not trying to fit to a specific vision/requirements or are more into trying it out to see if such type of setup can provide value for your business.

When not to buy an off the shelf CDP

There are multiple reasons not to buy an off the shelf CDP, from the overall depth of identity resolution that they offer, to the level of customization and control over the different integrations that is required, as well as the overall immaturity of the market and the operational costs that purchasing a CDP entails.

You need to cater to deep identity resolution

Although some CDP offer some more complex identity resolution, the typical identity resolution offered by customer data platform is fairly basic and CDPs don’t usually quite go the full extent as an off the shelf or custom MDM platform would.

Most CDP platforms only tend to offer an audience push integration as part of the CDP offering, one of the reason for this is that propagating Master Data Merges can be quite complicated and is dependent on the target systems to which the updates need to be propagated to.

Only offering an audience push simplifies the integration complexity for the CDP, but also diminishes the ability for these systems to behave independently. Every data point needs to be ingested back onto the Customer Data Platform to benefit from the identity merging functionality.

Integration often is a blackbox that might be inflexible and over which you have little control

Customer data platforms typically provide built-in integrations with different systems. These integrations tend to be a blackbox, with little to no visibility as to when it is running, or no highlighting as to what error might occur during the transfer.

The integration might also not provide not be flexible or complete enough, you might not be able to integrate all the different data feeds that you might wish transfer. Depending on the CDP and the target system, it might only transfer an audience, transfer events or get data back. The frequency of integration might also not fully meet these requirements.

When relying on a pre-built integration, there is often a loss of control, you will no be able to fully define the data-structure of the data that will be transferred or you might not be able to define the frequency and timing of these data transfers.

You need to cater to advanced or custom requirements

As an off the shelf platform, CDPs need to cater to fairly generic use cases that are applicable for a wide range of customers, as such they might not be able to cater to more advanced or custom requirements that are mainly of interest for your particular business and as such might not cater to your specific business requirements.

This can be highlighted by the data model used by some of these CDPs, that might not fully supports associations to different data entities such as product or store or deeply nested attributes.

Another requirement that is often not well tackle by some of the off the shelf CDP, lies around data-retention. These CDPs need to handle a wide range of requirements and data sources, web, mobile, backend-systems…Supporting the amount of storage for web events and mobile events is not quite the same as registered customer profiles and transactional information, which happen more infrequently and in lower volumes… If your requirements are that you need to support certain types of data for extended period of times, off the shelf CDPs might not cater to them.

Maturity

The CDP market and offering is quite new and to some extent immature, the platforms being offered are typically not as battle tested as some other offering such as CRM and Marketing Automation platforms and can be prone to bugs. For a lot of the vendors, being able to showcase a wide range of integrations, also covering a wide depth of integration with these vendors is a key selling point during pitches and RFP responses. They have the incentive to promote developed integrations as soon as possible even if not fully battle tested.

There is a fairy varied and wide offering on the CDP market and not every vendor might have reached a stage of maturity in their software.

Operational cost is an issue

Customer Data platforms, are typically not cheap and require a significant software license component. Building a custom built CDP is also not cheap and requires significant capital investment as well as some maintenance cost. If you are favouring capital expenditure to operational expenditures, going for an open-source or custom-built CDP could be preferred.

What are the alternatives to Off the shelf CDPs?

There is a few alternative to off the shelf CDPs, such as open-source CDP, leveraging datawarehouses and datalakes, building your own custom CDP or relying of Master Data Management and Marketing Automation softwares.

OpenSource CDP

Apache Unomi is an open source Customer data platform. It provides the core functionalities of a CDP such as identity resolution, profile management, and the segmentation capabilities. It currently has a very limited numbers of built-in connectors and does not come with a standard UI.

Going for an open-source CDP, will require a significant amount of development in order to fill the gaps that it has to your particular requirements, specifically in building the UI and in building the different integrations required.

DataWarehouses & DataLakes

Datawarehouses and DataLakes can perform a lot of the functions of a Customer data platform around identity resolution, creation of user profiles and segmentation. If you are running softwares on top of it, for example a Facebook Audience API audience push, you would be able to replicate most of the core functionality of a CDP.

The difference there is that most of these DataWarehouse and DataLakes aren’t usually built for real-time processing, that every pipeline would need to be custom and that they would not offer a usable UI for marketeer on top.

Custom Development

It is possible to custom built a CDP, it does require a decent amount of engineering resources in order to setup the necessary infrastructure and application logic. Going for the custom development route, has an impact on time to market, engineering efforts and creates a need for maintenance.

Master Data Management Software

Master data management software, can be leveraged in order to perform the “identity resolution” part of a CDP and built up the unified profile. Most MDM software rely around the idea of field or record Survivorship in order to create this golden record.

The MDM by itself would not cover a lot of the functionalities of a CDP, such as their segmentation capabilities or their external integrations. Going for a MDM as alternative to a CDP would require additional software to complement it.

Marketing Automation Software

Marketing Automation platform, typically do not offer the identity resolution aspect of Customer data platforms. They however do cover some of the functionalities of CDPs, the main one being segmentation capabilities, other capabilities may also be built in such as integration onto different digital marketing platforms such as google and facebook, as well as the ability to leverage clickstream data.

Summary

There many reasons to go for off the shelf CDPs, but there is also drawbacks associated with them. It is important to understand what your requirements are and how the different solutions fit them. There are quite a wide range of CDPs, each focused on different axis, but if you have some specific requirements, the platforms on offer may not fit them fully.

There are a couple alternatives to going for off-the shelf CDPs such as leveraging open-source versions, data-warehouses, developing a custom CDP or leveraging MDM and Marketing automation software. The right choice of solution will be as always dependent on the exact requirements.

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