The case against composable CDPs
Last updated: March 13, 2023
Companies are taking in more data than ever — and most of them are putting it to waste.
Thanks to the pandemic-induced acceleration of digital marketing, the explosion of new channels, and advancements in CDP technologies, businesses are taking in exponentially more data than ever. Global data creation rose to 97 zettabytes in 2023, an all-time high. This number is expected to hit 181 zettabytes in 2025, which would be a 448% increase from 33 zettabytes in 2018. (For perspective, that’s enough storage to hold more than 39 million copies of the entire World Wide Web.)
At the same time, they have less programmers than ever to help them use it effectively. (This covers everything from collecting their customer data, to cleaning it, resolving customer identities, and making that data usable for marketers.)
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And that gap is only widening, according to a bevy of new research.
- Around 40 million technical jobs go unfulfilled each year due to a lack of skilled talent.
- By 2026, it’s estimated that there will be 1.2 million engineering job openings. Job openings for software developers, quality assurance analysts, and testers are also projected to grow by 22% year over year between 2020 to 2030, per the US Bureau of Labor Statistics.
- According to a new Korn Ferry report, companies risk losing $8.5 trillion in revenue because of the lack of skilled talent.
As businesses scramble to find skilled programmers, they’re looking for no/low-code software that minimizes their reliance on developers. In the CDP realm, composable CDPs have emerged as the new lower-code alternative to their traditional counterparts.
Unlike integrated CDPs, which serve as a one-stop-shop for all your data management needs, composable CDPs are pieced together with software from different vendors. You might have one tool for data collection, another for integration, another for identity resolution, etc.
With composable software, the argument goes, businesses can repurpose their code so they can streamline their workflows and move more quickly than their competitors.
Can a composable CDP really help businesses sidestep the technical complexity of data activation? Is a CDP really better than the sum of its parts? Or are businesses better served by an integrated CDP?
What are composable CDPs?
Customer data platforms consist of four key components: a data warehouse and a data collection framework, as well as data transformation and data activation capabilities.
Integrated CDPs house all of these functions in one solution. Theoretically, a customer’s profile is created, enhanced, cleaned, standardized and activated — all in one place. Instead, composable CDPs use the best-fit software to meet each of these individual needs, rather than using an all-in-one solution for all four. A common line of reasoning is that companies don’t need the customer database if they already have a data warehouse solution.
But few companies have data warehouses. (Current estimates range between 18 and 38%.) And even fewer have data that is properly cleaned, unified and formatted in a way that sales and marketing teams can use.
So unless your data warehouse solution is already optimized for marketing purposes, it’s unlikely that the composable CDP + data warehouse combination will help you take your data from collection to activation quickly enough to deliver the personalized experiences your audiences expect.
What are integrated CDPs?
To contrast, an integrated CDP centralizes all of your data management tasks into one platform. This way, customers can collect customer data across every channel they use to reach their audience. Then they ingest that data, clean it, and use it to create a single customer view (SCV) for each customer — and most, if not all, of this process is automated.
Thanks to these processes, each customer’s profile is complete, current and consistent across each channel. That makes it a lot easier to see how individuals are interacting with your business on a daily basis, rather than making broad judgments about what different segments are doing. From there, you can create more actionable audience segments and orchestrate elaborate customer journeys across channels.
Repeating the buying and implementation process multiple times for different CDP tools can also negate the biggest benefit of CDPs — streamlining all your data management processes into one solution.
In most circumstances, an integrated CDP will help you liberate your customer data more quickly and efficiently than is possible with the composable approach.
Don’t get us wrong: The software developer shortfall is real. And everyone needs to maximize efficiencies. But it’s worth considering whether you’re skimping in the right places. Penny late and a dollar short, and all that.
Using a composable CDP might save developer time and resources on the front end. But in most circumstances, splitting your CDP into four or more different tools is going to add time and stress to the process rather than reducing it. Rather than using a composable CDP, look for other ways to simplify your tech stack.
For instance, Omeda combines an integrated CDP with native email, marketing automation and subscription management functionalities. This empowers marketers to collect and unify their customer data, add to them to ongoing campaigns, then activate those campaigns all from the same platform.
Getting started is easy – schedule a demo with us and we can show you how a fully integrated CDP can help you collect, manage and activate your data in just a few steps.
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