Here are the top 10 predictions (and a bonus prediction) around what lies ahead (in the next 2-3 years) for Customer Data Platforms (CDPs). We all know the CAGR for CDP is pretty high and this growth is driven by a number of factors like the increasing need to unify their customer data, the growing importance of customer personalization, the surging demand for delivering experiences, and the rising adoption of AI and ML in marketing. So it is necessary to understand how the CDP will evolve to make the right decisions today.

1. The Future of CDP
[2-3 years]
October 2023
Businesses need to know how CDPs will
evolve in the next 2 to 3 years to make
the right investment decisions today.

2. CRM Customer Relationship Management
Collect 1st party data about known
customers and prospects to manage
relationship.
DMP Data Management Platform
Mostly 3rd party data. To improve media
purchases, ad placements and create
lookalike audiences
CDP Customer Data Platform
Collects, analyzes, unifies, and shares 1P,
2P and 3P data while respecting privacy
laws.
CEP/CXP Customer Experience Platform
The next iteration: Contextual experiences
authoring and differential privacy
enablement with extensive automation
Managed by Sales teams
Helps with sales cycle
Used by marketers,
ad agencies,
and publishers
Managed by Marketing teams
Provides customer 360 view
DMP
CDP
CRM
Privacy
issues
Fading 3P
cookies
Enrichment &
targeting
CE &
CX
Managed by IT
Very rigid
MDM
1990
2000
2022
2016

3. “
Today, CDP is the growth catalyst, cost optimizer (marketing) and customer
experience enhancer.
Analysts predict a CAGR of 24% to 34%, based on the assumptions and
methodologies used to arrive at the numbers. This means a high growth rate
for the CDP industry.
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4. 10 Predictions
And Trends with a bonus prediction!
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5. 1. Focus beyond the Marketing
community
CDPs will no longer be a CMO (Chief Marketing Officer) only
proposition. It will span Contact Center, Supply chain & Inventory
Management and R&D teams.
Benefit: One tool for multiple teams with one objective -
efficient & effective customer/consumer focus
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6. 2. Integration with data
marketplaces
To both enrich (profile) data and gain insights for micro-
segmentation, personalization and targeting through established
data marketplaces like Datarade, and LiveRamp.
Benefit: Avoids the need to buy data separately and find a means
to integrate with CDP for insights. Faster time to market.
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7. 3. Built-in data clean room
capability
The ability to work seamlessly with one or more of the existing
data clean room providers to better understand customer
preferences & behaviors and build nice audience segments for
targeting.
Benefit: Ad targeting, measurement, attribution, and audience
insights.
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8. 4. Tight integration with CIAM
Integration with Customer Identity and Access Management
(CIAM) tools like Auth0, LoginRadius, ForgeRock can reduce
friction points in the user journey. Through identity data from
various channels, along with their preference, consent and usage
patterns, a deep understanding of customers’ behaviors and
transaction patterns can be unearthed.
Benefit: Better targeting, profile accuracy, pre-churn segment, CX.
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9. 5. In-built Data cataloging and
lineage module
Either an in-built module for automated data cataloging, PII
fields tagging and data lineage, or the ability to integrate
seamlessly with one of the existing metadata tools in the market
like Alation, Purview, etc.
Benefit: Compliance and tracking
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10. 6. Infusion of AI/ML at more
touchpoints
Integration (automatically recommend and map fields in CDP for
standard/popular sources), tagging (identify PII fields and auto-
tag for improved security & privacy), standardization (auto-
standardization of fields like date, phone based on system
default/locale), unification (auto-profile data to recommend
deterministic vs probabilistic unification method).
Benefit: Efficiency and effectiveness. Shorter development time.
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11. 7. Advanced analytics capability
through Pre-configured
reports/dashboards
Not having to write new code or build a new schema for
reporting purposes. Basic reports like the funnel report,
attribution report, network graphs based on affinity/propensity,
etc. will be pre-configured with the ability to customize.
Benefit: Faster Insights
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12. 8. Pre-configured journey templates
CDPs have been around for a while now. Based on the
understanding of the standard journeys (e.g., welcome journey,
birthday, abandoned cart), and incorporating some of the best
practices some of these will get templatized for quick (re)use.
Benefit: Faster time to market.
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13. 9. CDP vendor consolidation
CDPs that are not end-to-end (e.g., Data CDPs, Analytics CDPs)
will struggle to showcase the UVP (unique value proposition) and
either join hands with other players to extend their portfolio, get
acquired by the bigger players or perish.
Benefit: Improved quality, better support.
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14. 10. Base/standard license changes
The current trend of modular pricing and “enabled on-request”
will diminish and the base license will include all modules to
cover the end-to-end CDP capability. Premium/add-on pricing
will be limited to niche integrations and customizations.
Benefit: Predictability and transparency.
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15. BONUS
While there are IFs and BUTs…
Indications show that this could become a reality in the next
2-3 years
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16. Bonus: Potential to enter Customer
MDM market
Organizations that do not have a Customer MDM, and industries
that are not heavily regulated are likely to leverage CDP as their
(pseudo) master data management (MDM) system. With the
maturing of governance features around CDP, and MDM features
like hierarchy coming to CDPs, this is a thing to watch out for.
Benefit: Less dependence on IT.
Note: how MDM tools anticipate this and mature in the next 2-3 years will decide if CDPs will
truly take over MDM.
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17. References
https://www.globenewswire.com/en/news-release/2023/06/20/2690805/0/en/Customer-Data-Platform-Market-
Size-to-Surpass-USD-9-92-Billion-by-2030-exhibiting-a-CAGR-of-24-4.html
https://www.mordorintelligence.com/industry-reports/customer-data-platform-market
https://finance.yahoo.com/news/customer-data-platform-market-report-113800100.html
https://www.expertmarketresearch.com/reports/customer-data-platform-market
https://www.marketsandmarkets.com/Market-Reports/customer-data-platform-market-94223554.html
https://www.fortunebusinessinsights.com/industry-reports/customer-data-platform-market-100633
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18. THANK YOU!
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Author:
Jayakumar Rajaretnam
Consulting Partner
Jayakumar.Rajaretnam@gmail.com