To Bunde or Unbundle
Your CDP!

Originally written: 4/25/22

I spend a lot of time talking about CDP’s (customer data platforms). For a quick education, CDP’s allow clients to gather, segment, and distribute first party customer data. As a connector of data, LiveRamp is often on the receiving end of this equation, helping connect CDPs to end applications. So you can imagine my shock when I saw this blog from reverse ETL provider Hightough: “The CDP as we know it is dead: Introducing the Unbundled CDP”.

Nota bene: Reverse ETL is a process to load data from a data warehouse to an application (such as LiveRamp), so Hightouch isn’t exactly impartial to the conversation. But the blog brings up an interesting point, if Data Warehouses, like BigQuery, are designed to be centralized repositories of enterprise data that can be queried, transformed and distributed, then aren’t data warehouses and CDP’s duplicative? And on top of that, if CDP’s require duplicative data feeds from and to a data warehouse, isn’t adding a CDP adding more complexity to my organization for little additional value? And how can they both be rising in popularity at the same time?

My personal experience is that many of our clients actually take the Buy (“Bundled”) AND Build (“Unbundled”) paths in parallel. I see two simple reasons for this beyond the obvious one which is that CDPs and data warehouses have different technical capabilities that handle different data sets and thus can implement different use cases (this will be a Eli’s Thoughts topic in the weeks to come). The first additional reason is that CDP’s, unlike Data Warehouses, are typically designed to be operated by a marketer. Meaning low to no code interfaces that put a much lighter strain on a tech ops team (data warehouses are usually used by data and analytics teams). Second, and as a related point, many organizations are struggling with having the manpower to build and operate a complex data warehouse “unbundled” CDP’s. This is always true, but especially now in the “Great Resignation” economy. So the desire to invest in tech intensive products is tempered. Until “unbundled” CDP’s meet the UX capabilities of the traditional “bundled” CDPs, I think it is too early to say “The CDP as we know it is dead”, and I would guess most organizations will continue to employ both a data warehouses and CDPs under the same roof to accomplish different goals, with different teams.

The takeaway I unequivocally agree with the author on, is that the CDP space, and technology as a whole for that matter, is in constant change. The investments we make today need to be viable and fruitful years down the road. This requires understanding not just current needs, but future needs and mapping the solutions that will provide the greatest return in the long term. Your LiveRamp team is always here to have these conversations!

Thanks for reading and have a great night!

Eli