The CDP Dilemma: Packaged vs. Composable Solutions

The world of customer data is complex and ever-evolving, and businesses are grappling with how to make the most of the information they have. 

At our recent fireside chat moderated by David Chan, Managing Director of Deloitte, we brought together some of the top CEOs in the Customer Data Platform (CDP) space to discuss a critical issue: packaged vs. composable CDPs.

Jason Davis, CEO of Simon Data, Boris Jabes, CEO of Census, and Alex Dean, CEO of Snowplow, shared their insights on the best approach to using customer data to drive business growth. In this blog, we delve deeper into the customer data divide, exploring the different priorities and challenges faced by data and marketing teams, and choosing the CDP that’s right for you.

The Customer Data Divide

Data teams and marketing teams have different responsibilities when it comes to managing and using customer data. On one side, you have the data teams, who are responsible for delivering high-quality data using scalable infrastructure. They focus on quality, consistency, and governance. On the other side, you have the marketing teams, who are responsible for running campaigns and driving personalized experiences. While they need data, they may not comprehend or care about data quality. They want data readily available in their preferred applications to do their jobs efficiently.

This creates a significant challenge for businesses because data teams and marketing teams often have different priorities and goals. Data teams may focus more on data quality and governance, while marketing teams prioritize speed and efficiency. This divide can lead to silos in data management and inefficiencies in data utilization.

To overcome this divide, businesses need to find a way to bridge the gap between data and marketing teams. They need a solution that allows data teams to deliver high-quality data with scalable infrastructure, while marketing teams can access the data they need in their preferred applications. This is where choosing the right CDP strategy comes into play.

However, with so many CDPs on the market, choosing the right one can be challenging.

Packaged vs Composable CDP: Assessing the Pros and Cons

During the webinar, Simon Data, Census, & Snowplow discussed the merits and pitfalls of taking a composable versus packaged CDP. During the back and forth debate, a continuous point raised was the impact of the level of data and marketing maturity in whether a business opts for a packaged or composable CDP. 

Alex kicked off the discussion stating that many marketing teams have previously struggled with fully packaged CDPs. Marketers simply don’t have access to the data they need to power their activity and want a plug and play approach. Boris added that in his experience regardless of maturity there are always customer attributes that are underutilized in the data warehouse. They both advocated that a composable approach to CDP brings all use cases closer to the data warehouse where the data team has already implemented data governance. 

On the packaged CDP side, Jason stated that there is no reason why a packaged CDP cannot sit on top of a data warehouse or lake to bring it closer to the data source, though not all CDP vendors share this approach. Regardless, both sides agreed with the gradual centralization of data into the data warehouse, and that data governance should be managed in your warehouse.

The panel next discussed the out-of-the-box nature of packaged CDPs. A packaged CDP out-of-box feature often gives marketers the ability to quickly implement a quick win campaign to deliver ROI for the business. Standardized approaches to identity resolution, for example, were often suitable for many businesses that don’t require more complex approaches. This was suggested to be simpler and a less risky approach for businesses, particularly for data teams that haven’t addressed the implementation of a composable CDP previously. 

Though a composable approach came into its own as teams reached the limitation of a packaged solution. As teams create more complex automation and personalization the “cookie cutter” approach of a packaged CDP will likely become a limiting factor or if you want to use sensitive customer data but can’t place this in a third-party tool. From here onwards teams would be forced to start assembling different components to build the solution they need. 

Earlier in the webinar Boris raised that businesses are unique. An important point to consider both as your data and marketing maturity accelerates and that the scalability of composable in the long term will provide a longer-term solution for many brands.  

The Ongoing Packaged vs Composable CDP Debate

During the fireside chat, we had a chance to hear from industry experts about their real-world experiences and thoughts around packaged vs composable CDP solutions. Here are the key takeaways:

Census’s Thoughts: 

• Businesses are unique and they don’t genuinely feel like there is a thing that represents them uniquely in the market. Census took an approach of building Lego-like pieces that allow you to make the CDP out of your own ecosystem and tools. People can construct it in a way that works for them no matter who they are.

• Composability as a concept is going to be superior to pre-packaged solutions when assessing scalability. It gets you closer to the applications so you can tackle more complex workflows to deliver outcomes.
  
• The CDP market is moving towards interoperability, and organizations need to build in-house data governance and features that can run at that velocity.

Simon Data’s Thoughts: 

• One of the dirty secrets of MarTech is that data-driven marketing and marketing automation comes at the expense of data teams doing a lot of behind the scenes work. This creates all kinds of workflow issues between the two teams. Ultimately, if your marketing campaign process requires working cross-functionally with a data team, businesses are never going to be able to move fast enough. The fundamental goal of a CDP like Simon Data is to enable marketers while also meeting the requirements of data teams.
  
• Simon Data believes that data governance still needs to be owned at the warehouse-level. So many businesses have cathedrals of Snowflake and BigQuery permissioning set up - only for their customer data to be activated into dark corners of the internet where it is at tremendous levels of risk.
  
• Simon offers a different approach that sits on top of the cloud data warehouse, plugs into real-time streams and other APIs, and provides a packaged application that grants marketers access to the data they need while eliminating any behind the scenes engineering work.

Snowplow’s Thoughts: 

• More and more valuable data is being centrally consolidated and governed in the warehouse or lake yet marketers can’t access it. The composable CDP brings the use cases that marketers are trying to execute closer to the warehouse.

• Once you outgrow the cookie-cutter packaged platforms you have to start assembling different platforms to create a composable approach to overcome the challenges you face. 

• For a composable approach, you have to have an organization that is willing to take a composable approach and bring best-of-breed solutions together into a data platform. 

Making the Right CDP Choice for Your Business

Choosing the right Customer Data Platform (CDP) strategy can be a daunting task as it’s critical for businesses to leverage customer data effectively, provide better customer experiences, and achieve higher ROI. The lack of a clear definition and workflow for CDPs can make it challenging to determine which solution is the right fit for your organization's unique needs.

While packaged solutions offer simplicity and convenience, they may not always align with the unique needs and technology stack of your organization. On the other hand, composable CDPs offer flexibility and modularity, allowing businesses to select the best technology stack for their specific needs and integrate it with other technologies seamlessly.

A CDP can help bridge the gap between data teams and marketing teams, enabling both to work efficiently toward their goals. Data teams can deliver high-quality data with a scalable infrastructure, while marketing teams can access the data they need in their preferred applications to do their jobs more efficiently.

In today's fast-paced business environment, where data is king, selecting the right CDP strategy is essential to gain a competitive edge, make informed decisions based on customer insights, and create personalized experiences that delight customers. We recommend that you explore both packaged and composable CDP solutions and choose the CDP strategy that aligns best with your unique requirements and priorities.