Tealium Talks Customer Data Platforms with CDP Institute Founder David Raab

October 24, 2017

Tealium recently sponsored a whitepaper authored by David Raab on “Customer Data Platforms: How They Work, What They Solve & Why Everyone Needs One.” I had the pleasure of sitting down with David Raab, Founder of the Customer Data Platform Institute (CDPI), to get an in-depth look at the Institute, his inspiration and what excites him most about where CDPs are headed in the future.

Tell us a little bit about the CDPI. Why was it founded and what solutions is it providing for martech professionals?

The CDPI grew out of discussions with several CDP vendors who were finding that CDPs met many clients’ needs, but few companies knew that CDPs were an option. We decided to set up the Institute to increase awareness and understanding of CDPs as a category. Our theory was that this would help the individual vendors more than doing vendor-specific promotions. To that end, the Institute has focused on educating martech professionals about customer data management requirements in general, use cases for unified customer data, what CDPs are, and how CDPs differ from other types of customer data systems.

Why do you think it’s taken so long for CDPs to emerge into the space when the need for them has always been so large?

Historically, the only data available about most customers was their name and what they bought. It wasn’t until the Internet that marketers could capture detailed customer information outside of purchase transactions. The value of that data in predicting behavior is huge and it’s what triggered marketers to start thinking seriously about building comprehensive customer databases.

CDPs emerged to meet that need after marketers first learned how to gather data from source systems (think: web analytics) and then created custom systems to unify it (think: data warehouses). Only after they had built those custom systems could they then build standard software products to do the same thing, which is a CDP. The emergence of “big data” technologies and cloud-based systems helped too.

That’s the technology side. From the customer side, demand for better treatment emerged as consumers got used to personalization from leaders like Amazon. Once they realized that was possible, they felt every brand should do it, which pressured marketers to deliver.

Digital transformation is a business initiative that most brands are now striving for – how do CDPs help in driving that highly sought after digital transformation?

Digital transformation is an interesting use case for a CDP because it extends beyond marketing to the entire organization. Like personalized marketing, many digital transformation initiatives rely on a complete view of each customer. A CDP can deliver that and is designed from the start to make the data available to any system.

The CDP is a very logical centerpiece for many digital transformation initiatives. The biggest change… Click To Tweet

What excites you about where CDPs are headed in the future and the capabilities they’ll have? How do you see CDPs continuing to evolve and innovate in providing even more exceptional experiences for customers?

It’s a very dynamic category. We see vendors expanding their capabilities, sometimes to add features available in other systems and sometimes headed into new territory. Some of the newer frontiers on the horizon for CDPs are:

  • Very fast real-time processing, which could let a CDP support real-time personalization and even replace a DMP for ad bidding (which needs response time under 30 milliseconds vs 1 second response for conventional real time interactions).
  • Integrated machine learning and predictive analytics that will help guide customer treatments and other decisions.
  • New technologies, including artificial intelligence, to process unstructured data with minimum human effort. Ex: Adding new data feeds becomes easier.
  • Special purpose CDPs, such as systems for particular industries or small businesses. Specialization lets companies provide features that are especially suited to a particular set of users. This further speeds deployment, reduces cost and adds value.

Beyond new features, I’m excited to see more vendors entering the space, greater understanding of CDPs by marketers and technologists, and more recognition by other marketing technology vendors that CDPs can increase the value their own products provide to clients.

The General Data Protection Regulation (GDPR) goes into effect in just 9 months and businesses are starting to scramble to ensure their compliance. How can a CDP help a brand with data governance, privacy and security?

GDPR has specific requirements for privacy by design, transparency, presenting data to consumers, propagating data changes throughout an organization, documenting consent for specific uses of specific data elements, and tracing how data is used. All of those require centralized systems that can scour the organization for customer data, bring together all of the data related to each individual, and track data changes over time. And that’s exactly what CDPs are designed to do. Beyond all of that, CDP vendors are experts on customer data, so they should become critical resources as the GDPR deadline comes closer.

Thank you David!

Read the entire whitepaper here.

Wanting to learn more about how CDPs work, their key benefits and how they integrate with other solutions within a martech stack? Learn more here.