Report: CDP market chalks up fast growth as established challengers gain investment

The customer data platform (CDP) industry continues to grow apace, with 14 new vendors and US$236 million in cumulative funding added to the ecosystem in the last six months.

According to a fresh report from the CDP Institute, 12-month growth rates across the CDP technology space included a 48 per cent increase across vendors, a 64 per cent increase for employment and a 32 per cent rise in funding. The Institute has estimated total 2019 revenue for CDPs at US$1 billion and projects industry revenue will exceed $1.3 billion this year.

Of this, more than half of the companies accounted for as part of the CDP space sit outside the US, and US-based vendors are also reporting fast growth in external markets, particularly Europe and Asia-Pacific.

Over the last six months, consolidation has sped up across the fast-maturing CDP space, with three major acquisitions of CDP vendors occurring, four acquisitions of other firms by CDP vendors, and nine firms exiting through asset sales or repositioning. Notable CDP acquisitions include Dun & Bradstreet’s purchase of Lattice Engines in June last year, Mastercard’s SessionM acquisition in October, and Acquia’s Agilone purchase in December.

According to report authors, these developments show vendors are still jostling for position in a crowded marketplace where no one company is yet to establish a dominant position. Discontinued platforms, meanwhile, include Mintigo, whose assets were picked up by Ananplan, and IgnitionOne, whose assets are now owned by Zeta Global.

And it’s also arguably a reflection of the confusion stilling existing around CDPs across the marketing fraternity. According to the recent State of the CDP Report 2020 by Tealium, most marketers are planning on switching their CDP in the next 12 months, despite 85 per cent being satisfied with their current platform. What’s more, more than half said their CDP lacked basic abilities to ingest data from any channel, and buy-in to these platforms from other departments is a huge hurdle.

The Institute also looked at key CDP investments over the past year. These include a US$50 million investment into CDP vendor, Amperity, in July; a $35m cash injection into CleverTap in October; and a $32m investment into ActionIQ in January this year. The Institute labelled these firms “established challengers”, with substantial business outside to the top tier of CDP vendors.

In addition, several enterprise-level marketing technology giants stepped up their CDP efforts in the past year. Adobe, Oracle and Microsoft all released CDP products as defined by the Institute, Salesforce debuted pilot CDP implementations, and SAS, Teradata and SAP either announced CDP products or are expected to.

“Entry of these vendors will likely expand the CDP market substantially by encouraging buyers who were previously unsure about the validity of the CDP concept or uncomfortable with purchasing from relatively small independent software companies,” the report stated.

Read more: CMO DMP versus CDP: Which tech platform will win the marketing war?

The top five CDP companies right now based on employment are Segment, Tealium, ARM Treasure Data, SessionM and Optimove. The Institute also noted the average size of the five largest companies has more than doubled since 2016, from 146 to 381 employees, while average funding grew from $55m to $125m.

Alongside market presence and growth, the report looked into the types of CDPs available, separating vendors into four categories: Data, analytics, campaign and delivery. New funding over the last 12 months was found to be highest across campaign- and analytics-oriented platforms.

The definition of CDP as set by the Institute is a packaged software offering that creates a persistent, unified customer data accessible to other systems. This is distinct from CRM platforms, which work primarily with their own data, or data management platforms that are primarily external data sets accessed for limited periods. The Institute also noted that while data warehouse and other software suites offer functionality that is similar to a CDP, these are often limited to structured data or internal inputs.

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