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March 19, 2019

CDP Industry Confusion Doesn't Invalidate CDP Industry

David M. Raab, CDP Institute

Technology analysts comment on the CDP industry all the time.  I usually don't respond.  But since the Winterberry Group's recent report criticized the CDP Institute by name, some comment seems appropriate.

The main critique of the report is that the CDP Institute includes too many vendors in its list of CDPs and applies too inclusive a definition.  We recognize the confusion in the marketplace.  But we feel that a narrow definition of CDP would not solve the problem, since there's nothing to prevent vendors from calling themselves CDPs whether we agree or not.  Rather, we believe buyers are best served by including any vendor whose system solves the problem that a CDP is intended to solve -- building a persistent, shareable customer database -- and then helping buyers understand how these systems differ. 

We have recently been using a division of the market into three types of CDPs: those that primarily build the database, those that offer analytics in addition to the database, and those that provide personalization in addition to the database and analytics.  Our reports, including the latest industry update (download here), specify which vendors fall into each category.  This, along with the more detailed information in our Vendor Comparison Report  (download here), is a good place for buyers to start sorting out which vendors they should consider in depth.

There's plenty more work to be done to reduce confusion.  Indeed, there are several projects under way at the Institute to do this.  I don't want to disclose them prematurely but will note that it has recently become clear that we need to subdivide the "data CDP" category between vendors that primarily collect data and vendors who are expert at building and distributing the customer database.  So look for the number of CDP categories to grow. 

This may sound like a recipe for still more confusion, but our plan is to avoid that by making it easier for buyers to understand which use cases are supported by each category.  That will let them start by considering all possible solutions and then quickly narrow their consideration to a suitable subset.  Educating buyers and arming them with relevant information will be the real key to reducing confusion.  Ignoring the crowded reality of the CDP marketplace won't help at all.