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Suite success? Not if you’re using them as a CDP

(Image credit: Image source: Shutterstock/Jirsak)

Although 2020 was a turbulent year, it didn’t seem to dampen the appetite for mergers and acquisitions, particularly in the data space. According to Synergy Research Group, the value of M&A activity related to data centers in 2020 surpassed the $30 billion mark. Many of these deals were so-called marketing cloud suites keen to take a piece of the growing market for customer data platforms (CDPs) – despite having historically called them a passing fad. 

While marketing cloud suites – or rather, the technologies that comprise the suite – have a role to play in a company’s technology stack, there are numerous reasons why these solutions don’t compare favorably to a pure-play CDP and can sour ambitions to maximize customer data assets.

Before getting into the reasons, it’s important to understand why CDPs are so important. A CDP is a built-for-purpose solution designed to give marketing, customer experience, commerce, digital product, analytics, and other growth-focused teams access to unified and actionable first-party data that offers both confidence and utility whenever and wherever they need it. With the deprecation of third-party cookies and the growing importance of first-party data, CDPs are high on the wish list of CMOs. CDOs, CXOs, and CTOs alike. But not all CDPs are created equal, and with many marketing cloud suites starting to offer clients ‘CDP’ capabilities (often for “free”), tech buyers should tread with caution. 

Beware fool's gold 

When analyzing the CDP functionalities offered by the big marketing cloud providers, their pricing strategies will tell you a lot about the value – or lack thereof – they deliver. Real Story Group founder Tony Byrne recently observed that a Salesforce CDP option at around $50-65k a month puts it at the very top of the typical CDP pricing range, yet still limits you to just 500k records (compared to competitors that offer sophisticated data processing and activation for tens of millions of records at the same price point.) With the volume, velocity, and variety of data generated every day, this cap will be equally limiting for enterprises that want to streamline their data management efforts or engage their customers effectively – while still being far too expensive for mid-market and SMBs to even attempt. 

Other marketing cloud vendors effectively give away their CDP by bundling it with renewals for existing services or being opaque about their pricing – making it much harder for end-users to come to an informed purchase decision. As the saying goes, if something looks too good to be true, it probably is, and it’s always worth diving under the hood for a closer inspection – as well as accounting for the non-software costs that will be incurred no matter what.

Marketing clouds are not platform or data agnostic 

The concept of using a collection of marketing tools within a single-vendor suite to reach, convert, retain, and analyze one’s customer base is certainly welcomed by many companies. But the promise of an end-to-end marketing cloud suite that encapsulates all customer data and covers the spectrum of essential marketing initiatives and activities — namely, data management, privacy compliance, personalization, lifecycle orchestration, and analysis — is simply a lot of style with no substance. 

The problem with using a marketing cloud suite rather than embracing a best-of-breed approach built around a pure-play CDP is that you end up with a “frankenstack” of disparate technologies all built on different architectures that don’t work well together. This effect is often more pronounced where a marketing cloud vendor has acquired different players. It can take time for these platforms to be integrated and, more often than not, these solutions are quietly retired.

The inherent value of a pure-play CDP lies in connecting your entire technology stack without replacing all of the tech currently in it. But the marketing clouds’ inadequate or nonexistent connections to non-proprietary solutions means critical data and tools outside the cloud ecosystem either can’t easily share data with the suite, or require lengthy custom work to sync that data – ultimately limiting the value you get from the technology and your investment. 

Marketing clouds reinforce data silos 

The marketing clouds’ bias toward integrations with technology that is only a cross-sell away (and not tech outside their ecosystems) creates a number of problems for both data unification and data activation.

For instance, the marketing cloud suites claim to offer a legitimate 360-view, but in reality, they can only take advantage of the customer data within that environment. To have a complete single customer view, you need every pertinent data point about you customers from all marketing and business systems to coalesce into a centralized database of unified profiles – something only a built-for-purpose CDP offers.

Data silos in the cloud suites also create or reinforce the significant distance between where customer data is stored and where it’s needed – preventing teams from quickly activating the data so they can interact with customers in a timely, personalized way. 

A pure-play CDP, on the other hand, not only unifies first-party customer data in a centralized location, but also delivers that unified profile data back to the business technology users in marketing, ecommerce, analytics, etc. in a format that their tools can use to improve how they engage with customers, conduct modeling and analytics, build segments, and perform other critical tasks.

Marketing clouds create process inefficiencies 

Data silos in the cloud suites also mean the processes within them takes more time and resources than built for purpose CDPs. 

As mentioned, teams who rely on marketing cloud CDPs can only take advantage of the customer data within that environment. That means they’ll need to rely on other entities (e.g., IT, the analytics team, external agencies, etc.) to organize or integrate any data outside the suite for analysis and activation, which introduces friction, delays, and room for error in the process. For example, when your analytics and data science teams have to spend time pulling and normalizing data across multiple systems and datasets, it leaves less time for marketing or customer experience teams to take action on the output of those efforts.

Multiple user interfaces for multiple solutions in a given suite also make it more difficult for marketers to access and manage their first-party data in a single location, not to mention, learn how to use all the different interfaces.

With a pure-play CDP, business users can access all of their first-party data through a single UI that enables efficient analysis, activation, segmentation, modeling, and lifecycle orchestration.

So, if a CDP can do all this, should companies eliminate a marketing cloud entirely? The answer is no. When you make the customer the central object in your technology stack with a CDP, your existing marketing cloud tools will get faster and smarter as a result. 

But marketers should treat each solution on its own merits and understand how it brings value to their technology stack. If you’ve done your homework around your use cases and understand your data, it becomes pretty easy to evaluate not just who should be on your long and shortlist of potential technology vendors, but also who should eventually be your vendor partner.

Cory Munchbach, COO, BlueConic

Cory is a sought after speaker and industry voice. Prior to BlueConic she was an analyst at Forrester Research where she covered trends and the fast-moving marketing tech landscape.