The Evolution of Customer Data Platforms
The idea of bringing all of your customer data in one place, cleaning it, segmenting it, and activating against is sensible — after all, customer data is a key component of data-driven marketing. This is the logic behind the emergence of the CDP category that we see and hear of today.
The challenge with legacy constructed CDPs is that while, they accomplish the idea of becoming a data repository for customer data, they become an isolated tech stack from the rest of the data. The classic issue of multiple sources of truth aka data silos and copies of data… The very real problem that companies are trying to address today.
Not to mention, the other challenges that follow —
- Governance, security concerns around data that is highly sensitive (PII) and valuable for brands.
- Longer TTV (time to value) — implementation is not turnkey.
- Inflexibility of being able to construct the rules, segmentation, modeling needed to run dynamic activation + personalization.
- Higher TCO, lower ROI over time.
Let’s divert just a little bit and talk about TCO really quick because it’s extremely important with any technology decision you make. When you look at TCO (Total Cost of Ownership), you need to consider all three aspects — 1) Acquisition Cost, 2) Usage Cost, 3) Value. Looking at just the line item (visible) costs isn’t enough and can lead to inaccuracies when making key business decisions.
Alright, now the fun part.
Modern CDPs on Snowflake and what that means, why it matters.
Packaged CDP on Snowflake — Snowflake has a strong set of CDP partners that have constructed their architecture with Snowflake as the backbone of their solution. These CDP partners can provide an end-to-end offering on top of Snowflake’s Data Cloud Platform which eliminates the foundational problem of multiple copies of data.
The benefit of this approach is that it provides a managed solution — this is great for companies who lack support of an IT team to manage data and want to opt-in for a fully managed service that allows for flexibility, scalability but without the operational overhead. Modern packaged CDPs can still offer “composable” aspects but with the benefit of an out-of-the-box solution.
Composable CDP on Snowflake — The best way to understand this is that each component of the CDP is represented by a different partner solution that is independent of each other. This allows a company to pull together best-of-breed applications as well as have more granular control over the actual data models, identity spine, and data transformation.
The benefit of this approach is that it provides increased control — companies can continue to leverage existing investments in Snowflake and allow their IT teams to have more control in managing the data pipelines and the applications (ie. reverse ETL partners for activation).
That said, it doesn’t always have to be a one-or-the-other approach. There are companies looking at a hybrid approach depending on their use cases, current resourcing, and technology investments.
There are a number of questions to consider as you think about the best approach for your business, such as:
- What use cases matter to our business? Do we need real-time data access, live data for these use cases?
- What activation or personalization channels are part of our marketing goals?
- What other “data out” requirements or needs do we have?
- Do we have a centralized IT team to manage additional pipelines? Do we have the resources necessary for implementation?
- Requirements of an ID resolution layer within the CDP or within the data cloud platform? Are there other downstream use cases that require the identity layer?
- Segmentation needs — how complex or simple?
- What are the data collection and ingestion patterns we have today? Does that need to change?
This is not exhaustive by any means but a good place to start.
Snowflake is uniquely positioned to support your marketing use cases. We operate across all three major public clouds thus truly providing a multi-cloud approach. We are neutral and conflict-free from a business standpoint as we are not a content platform, content publisher, or ad seller nor are we an ID partner, SSP, DSP, or measurement provider. However, we have done a lot of the heavy lifting to build partnerships in these categories so that our customers can facilitate end to end use-cases in a streamlined fashion with governance and privacy at the forefront.
When you think about the Snowflake Data Cloud, we’re providing the underlying scalable, robust infrastructure and bringing the ecosystem of partners and customers together. Not only do we have data providers in our marketplace, we also have application providers that offer their services directly where the data lives. It’s a paradigm shift where Snowflake is bringing the technology to the data, thus eliminating data movement.
This allows us to be the foundation of the modern marketing data stack, and in particular, CDPs.
