Smart Hubs vs. Dumb Spokes: CDPs and the Undiscovered Country

Star Trek VI memorably refers to the future as “the undiscovered country.”  Are Customer Data Platforms … the Undiscovered Country?

A climactic space battle takes place at the end of the film.  The crew is about to save the day, when they come under attack from an enemy that is invisible to them (of course! A Klingon Bird of Prey that can fire while cloaked, supposedly impossible).  As Enterprise’s shields weaken, Spock and Uhura realize they can upgrade a classic proton torpedo with an analytics package to track the invisible enemy’s exhaust!  Dr. McCoy performs “surgery” on the torpedo, and BOOM!  (go ahead and watch, I’ll wait)

Disruptive technologies often arrive at just the right moment, and succeed because they don’t adhere to the same assumptions. Marketing leaders are searching for orchestration nirvana when out of nowhere, comes the Bird of Prey that has solved the technical problems (firing while cloaked).  Marketing leaders might chase disruption for its own sake: the CDP is…. the Answer to All Our Problems!

Consider the forces pushing for CDPs:

• Ascendant martech buyers want to go omnichannel; customer identity and sprawling data are  becoming a significant pain point in that quest
• Plummeting cost of computing power and storage creates a new class of SaaS tool that can handle and manipulate these sprawling volumes of customer data securely.
• Marketers stop fighting aging IT infrastructure and just build on top of it through integration.  Easier to keep legacy enterprise /POS systems and ingest their data than to force major systems or retail stores to change
• Marketing Cloud fatigue: market oligopoly (Salesforce, Oracle, Adobe, IBM,  SAP), difficult integration, premium pricing, inflexible data models

The CDP promises a generational and procedural shakeup of enterprise marketing technology.   That shakeup has its own momentum, and who doesn’t like sticking it to the man (IT)?

Marketing teams in large enterprises became accustomed to the complexity of storing data in multiple places, having analytics systems separated from execution, the limitations of proprietary protocols and inflexible data models.  Interoperability became a dream hiding a back-end nightmare only solvable with bespoke Systems Integration work.

CDP’s seek to avoid that trap using cheaper storage and processing, flexible data models, and productized vendor integrations, as marketers face new imperatives for cohesive cross-channel marketing, and  look to scale and automation to drive ROI.  With access to all of the data and some other tricks, CDPs promise to power 1:1 personalization at scale.  For now, CDPs benefit from the enterprise IT shortcomings above and help marketers fill the cracks.

However, CDP adoption represents a significant drawback: Customer Data Platforms do not send messages, or render content  to the end user, but they may trigger or orchestrate both.  Many enterprises leverage Multichannel Marketing Hubs for some level of orchestration as well as last mile experience delivery over email, web, mobile, programmatic, or other channels.

A multichannel marketer will certainly love many things about a CDP:

• Storage – Big Data scale with a marketer’s UI, purpose built for storing all things related to Customers.
• Unification – Profile unification and ID stitching is MDM for the programmatic age, and needed for fighting restrictions of GDPR, the walled gardens.  In this scenario, marketers can’t implement enterprise-wide data hygiene as a process so they entrust CDPs as a technical solution.
• Analytics –  Make it possible to measure the entire consumer journey, and develop smarter segmentation through seeing the entire enterprise.
• Orchestration  – Push the audience and the message to the final mile, but stop short of actual execution.

Vendors that accomplish the above could be smart hubs, implying that the spokes of the final mile don’t need to be so brainy.   What becomes of the smart investments marketers have otherwise assembled, for analytics, multichannel execution, or CRM?

Customer Data Platforms may leave a lasting impression on the marketplace.  Marketing leaders will seek more federation and democratization of data that enables modern CX, in CDP style: open access via API, streaming data,  emphasis on motion and orchestration across channels and devices, commodified execution.   Which vendors will rise to the challenge?

We’ll find out in the Future, The Undiscovered Country!