The CDP market is constantly transforming, with new vendors and approaches springing up as the market matures. The latest market buzz is around CDP Composability—basically deconstructing the various modules that make up an integrated CDP so that they can be purchased separately through different martech vendors.
This post is part of our 2023 Data Transformation Outlook series
Trending for a Reason: The Composable CDP
The CDP market has surged, but some adopters have learned that off-the-shelf CDPs aren’t the best solution for every business, despite their capabilities to help brands work toward a single view of their customer and to activate data across platforms.
Why not? Well, when brands already have a data warehouse in place and add on an integrated cloud CDP, some efforts can become duplicative, muddled, or siloed. In short, sometimes, an integrated CDP is overkill.
A Composable CDP Requires a Mature Data Warehouse Program
For example, a data warehouse may be one data source among many for an integrated CDP. But if a CDP adopter already has a mature data warehouse program—where its version of the Customer Golden Record is maintained—an integrated CDP customer database is unnecessary: All the data ingestion, pipelines, and database activities are already in place.
Analysts and domain experts want to avoid managing audience segments in multiple places because that would duplicate functionality. A composable CDP alleviates this duplication by using a Reverse ETL tool such as Hightouch or Census to activate directly from the data warehouse.
Benefits of a Composable CDP
On the other hand, a composable CDP approach allows a company to choose tools based on fulfilling missing functionality, avoiding duplicate functionality. In addition, as a brand grows and its data activation needs to scale, there’s a flexibility advantage in selecting only the tools a brand needs to complete its ‘composable’ stack.
Quite a few vendors in the current market have cloud data warehouse native applications. These applications allow for ingestion into the warehouse and activation from it. This removes the need to move data to another system, such as an integrated CDP. Not needing to move data diminishes risk, reduces unnecessary data duplication, and makes data engineers’ lives easier, in addition to lowering costs.
Needs Assessments Critical
If companies do not have a data warehouse with all the data sources necessary for marketing usage, a composable CDP is not the right tool. Many companies don’t have mature data warehouses or any data warehouse, and sometimes brands lack the engineering talent to support their future roadmap in-house. In these situations, an integrated CDP suite might be more suitable and provide quicker time-to-value.
It is critical for each company to rigorously evaluate its marketing technology and data needs, which is where a vendor-agnostic data consultancy expert like Search Discovery can make a huge difference.
For some companies, an integrated CDP with its OOTB identity tools, customer database, and activation integrations presents the best solution regarding time-to-value and organizational structure. However, with new options in the market, companies with a mature data warehouse program might look to Reverse ETL and other warehouse-native tools to accomplish the work an integrated CDP can do. As a bonus, they’ll be able to work within their current technology stack and assume fewer risks and less cost.
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