3 Questions Every Brand Should Ask About Their Own CDP Investments

The Customer Data Platform market officially expanded this week with both Adobe and Salesforce throwing their clouds into the CDP ring. For those of us who have been building this category for the last 5 years – we want to say welcome to the club! This is a huge acknowledgment from the two biggest players in marketing technology space, so we wanted to provide some context and clarity around the announcements and how we view this shift.

What Do These Announcements Mean?

Adobe and Salesforce’s expertise is not in customer data. Their pedigree is in content (think Adobe Photoshop) and business applications (think Sales Cloud). Both “built” their marketing product portfolio (Cloud) through a multitude of channel-focused acquisitions (think Campaign and ExactTarget – both ESPs). Fundamentally, these are execution-first products with very limited data capabilities.

These announcements mark Adobe and Salesforce’s attempts to pivot down from the execution and content layer into customer data. This is BIG. Not just for the marketing clouds, but also for the Customer Data Platform market. For the last two years, we at ActionIQ have been evangelizing the value of CDPs for enterprise marketers. In the last week, we’ve had two very large voices join the club and validate the market need – welcome, Adobe & Salesforce!

Why Are Adobe & Salesforce Pivoting to Customer Data?

Let’s just say it’s been a journey. Their first response was to say, “We already do that!” But as the CDP market picked up momentum, they were forced to respond. Salesforce called CDPs a “passing fad” and Adobe announced a new data layer they described as “more than CDP”. Fast forward to just a year later, Salesforce is finally committing to check-the-box CDP, and Adobe announces a (another?) CDP. What changed?

Ultimately, the market and their own clients forced them to make this change. We know for a fact that in the last 6-12 months both Adobe and Salesforce have lost out to smaller startups with CDP capabilities that power personalization at scale. We also know that once the honeymoon wears off from an Adobe or Salesforce marketing cloud purchase (think 12-18 months), enterprises start to realize that data integration and unification is not their core competency, nor the reality of their offering. Both the market and clients have succeeded in pressuring the marketing clouds to acknowledge their existing data gap and promise a future solution.

How Should Brands Think About This?

Now for the most important question, how should brands evaluate these announcements against their marketing strategy and capabilities? This can be summarized in 3 simple questions all brands should ask themselves:

1. Do you believe Adobe and Salesforce can build a CDP?

This goes back to an organization’s core competencies – do they have the pedigree and proof points to make you believe they can pull this off? Building a CDP requires deep expertise in data integration and architecture which becomes the foundation of the entire platform. Data must be a core competency and this can’t be solved through yet another acquisition.

2. If you believe they can build a CDP, can you afford to wait?

This won’t be a quick fix. At ActionIQ, we spent the first two years of our existence building out this data layer (and we didn’t have to deal with decades of legacy technology). Building foundational data infrastructure takes time. Big companies have a major force working against them that hyper-focused startups don’t – momentum. And not the good momentum, but the kind that makes doing anything new extremely difficult. Change is hard, and when it comes to something as foundational as core data infrastructure, it takes a long time.

3. If you can afford to wait, does it make sense for you to go all-in on a single cloud?

To answer this question, you have to ask another question – do you expect Adobe or Salesforce to be the only vendor you ever use, i.e., is it reasonable for your business to live completely within their walled garden?

Even if you believe Adobe or Salesforce can build their own CDP in a reasonable amount of time, you would still be constrained to only the channels that live within their cloud. Vendor lock-in is a major risk a company must consider, and in this case, it’s lock-in of your entire marketing tech stack. At ActionIQ, we believe that brands should have the flexibility to choose best-in-class channel solutions for themselves and reduce switching costs when their strategy changes or the vendor falls behind.

In closing, we see the last week as a massive win for the Customer Data Platform market and, more importantly, for brands wanting to be more personalized and customer-centric. CDPs will be a foundational layer in the enterprise marketing stack going forward – powering personalization at scale while optimizing marketing performance and efficiency. With these announcements, everyone has now acknowledged that single view of the customer is an unsolved problem and we can all move on to evaluating who has the best solution to solve it not just in the future, but right now.