Nancy Marzouk, CEO and founder of MediaWallah discusses how data owners have embraced CDPs as they needed a central database to house their customer data. But how these software platforms are now being replaced by “composable CDPs†– nimble CPD-like apps built on top of big data clouds.
The CDP rose to prominence several years ago as marketers realized they needed a central database to house their customer data. Before that, customer data existed in bits and pieces – customer purchase history was disconnected from loyalty program data, and email information was separate from website activity. Deloitte notes Opens a new window that 73% of marketing decision-makers consider the CDP critical to their operations.Â
 Once companies embraced the “360-degree customer view†concept, they poured a lot of money and resources into CDPs like Adobe, Segment and MParticle. The biggest marketers pay these companies millions to house and manage their data. But, a funny thing has happened in the data storage world – major cloud companies have built a flexible app ecosystem that allows key CDP components to live within the cloud. As a result, a new crop of CDPs has built on this foundation for a more nimble breed of CDP, allowing brands to save time, money and headache.
These “composable†CDPs have a number of advantages that brands should consider as they lean into their identity strategy and prioritize first-party data.
See More: How Composable CDPs Help Companies Quickly Activate Their C360 Strategy
The Three Things a CDP Must Do
 For any new technology to disrupt the CDP market, it needs to offer the core capabilities of the legacy technology. In this case, there are three major elements that marketers need.Â
1. Manage Customer Data
A CDP holds customer data from various inputs and allows companies to assign it to a single customer profile. This data management needs to be ongoing as new inputs arise as customers interact with the company. It’s a complex job that requires a nuanced understanding of everything from how wifi accounts work at a household level to complying with privacy laws to spotting fraud. Not only that, the data needs to be available for customer analytics.Â
2. Create Audience Segments
CDPs also need to have the ability to find commonalities across audiences to create segments based on criteria set by the user. CDPs have spent many development resources creating sophisticated models to create high-performing segments for their marketer customers.
3. Activate Data Across Channels
Most CDPs have pipes that allow them to share data with various marketing and advertising channels.Â
Today, many solutions in the market can do all three of these things. The cloud services already house customer data. They offer apps in their store to create audiences and already have activation pipes. Moreover, the composable solution is natively built on top (i.e., the apps), making them significantly faster and more secure than a third-party CDP platform.Â
 Marketers can now test different capabilities more easily via apps. They don’t need to install technology or move data, and costs are much lower. Rather than being tied to a single platform, it’s much easier to build a “best of breed†stack or even assemble different stacks for different use cases.Â
See More: Trusting Your Own Data To Fuel the Personalized Digital Buying JourneyÂ
Why The Composable CDP Has Legs
Another reason why marketers should consider the composable CDP solution is because the capabilities are powered by raw tech. Legacy CDPs are standalone technology entities that rely to a varying degree on services. Each CDP has a department of customer service reps, developers and integration specialists that help connect data, move data and analyze data because their technology cannot keep up with customer requirements.
Composable CDPs, by nature, give marketers a completely configurable suite of solutions. Marketers have direct access to their data and can select whichever app they want to use based on what capabilities it has. Apps can be quickly updated, and marketers can switch between apps to get what they need without moving lots of data around.
What’s more, companies can make the switch relatively painlessly. They already have people in their marketing department who deal with customer data, querying and segment creation, and they’re already activating audience segments for campaigns. A composable CDP actually makes this process less time-consuming, with no major new skill sets needed.Â
Make CDPs Work For You
CDPs, to be fair, come in a lot of different packages. Legacy CDP platforms often sit in the center of a big marketing cloud ecosystem that might be difficult for a marketer to replicate. However, there are likely a number of use cases where the cloud-native approach provides more flexibility and data security. Deloitte suggests a “dual-zone†approach.Â
For marketers with complex needs, spinning up a composable CDP instance on top of their data cloud doesn’t mean the other CDP needs to be immediately sunsetted. The two can exist in tandem as marketers figure out the right balance. For smaller or less complex marketing organizations, a one-for-one switch might be the right answer, creating cost savings and boosting speed and security.
Composable CDPs are so accessible and flexible that marketers should take the time to do some research. Chances are that they will become a bigger part of the ecosystem in the near future.
 How do you think composable CDPs will shape the future of data management? Share with us on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window . We’d love to hear from you!Â
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