CDPs vs. Marketing Automation Platforms: What Marketers Need to Know
Building the best tech stack for your business needs is no easy task — and as more solutions pop up and teach stacks increase in complexity, selecting solutions will continue to increase in difficulty. Choosing the right data solution (or even differentiating between them) can be harrowing, so we’ll be breaking down the top platforms marketers use to help you decipher which is right for your needs and help you build a martech stack that works for your needs. At the center of any future-proofed tech stack is data and there are so many different solutions to solve for “fragmented data”. In this series (Part 1 of the series, CDP vs. CRM can be found here and Part 2 of the series CDP vs. DMP can be found here), we’ll explore some of the most widely used platforms and which ones can best support marketers and drive positive results for your business. Up today is Customer Data Platforms (CDPs) versus Marketing Automation Platforms (MAPs).
Both are well-known platforms, and both deal with improving the customer experience, but they are worlds apart in function and purpose — let’s dive in.
Primary purpose: CDP vs. Marketing Automation Platform
Marketing Automation Platform: Marketing Automation Platforms (MAPs) make up the broadest category of technology we have discussed thus far, with hundreds or even thousands of these platforms on the market. They do exactly what the name says — automate marketing functions. Every individual platform has different features, different verticals they serve, etc. — so just searching for one based on what kind of business you manage can narrow your search considerably.
And generally, marketing automation is synonymous with campaign management — meaning most of these softwares intake new customer/user data and automatically (or manually) add the individual to a pre-built campaign. Some systems are more sophisticated than others and will adjust the communication flow depending on activity and lifecycle stage, but most require manual list pulling and work for a marketing team to function.
Some of the larger marketing automation players are actually two tools in one — typically a CRM (you can learn more about CRMs here) attached to a campaign management system. For businesses just starting out, with little customer data and a smaller budget, that can be a great option to ramp up campaigns, but marketers soon begin to feel restricted by the limited options these systems offer and the manual time drains involved in managing the platform.
CDP: A Customer Data Platform, or CDP, as defined by the CDP Institute, is “packaged software that creates a persistent, unified customer database that is accessible to other systems.” Essentially, CDPs take all of your different data sources and unify them into a ‘Single Customer View’. This enables businesses to move past looking at their data on a channel by channel (or even departmental) basis and allows marketers and other employees to gain access to a holistic view of every customer.
As channels and data sources have expanded in the 21st century, the gap between marketers and the data they need to be successful has grown. Often times organizations will face significant roadblocks in the form of ownership struggles and back-and-forth between data science/engineering teams and marketing teams struggling to define the rules of engagement with customer data. To combat these challenges, CDPs were built to provide marketers with data access, activation, control, and speed. Their sole focus is helping marketers deliver more relevant, responsive customer experiences by activating customer data in real-time while cutting out the time-consuming, manual work typically required (and tug of war with data scientists).
Unlike previous platforms we’ve discussed in this series, the average CDP and marketing automation platform will not have overlap. But, both of these platforms are beginning to evolve and iterate — and that may change. Increasingly, marketing automation platforms offer some sort of database within the platform (though these will not rival the complexity or scale of CDPs) and certain CDPs, like the SmartHub CDP, is offering a full-service solution for marketers from data unification to predictive intelligence to marketing automation, all in one platform.
Who needs one: CDP vs. Marketing Automation Platform
Marketing Automation Platform: This software is used by both B2B and B2C marketers, across almost every industry and vertical. While every marketing team needs some form of an automation system, businesses will often outgrow the platform that markets themselves as “marketing automation platforms” and move onto more sophisticated, AI-powered platforms.
CDP: Most marketers today have heard of and know the benefits that a Customer Data Platform can offer. It’s the ideal tool for marketers who are investing in AI or looking to implement more data-driven strategies. CDPs bring the tailored, relevant experience of 1:1 targeting not just to advertising channels, but to the entire customer experience. It’s the ideal tool for marketers looking to wow their customers — all with the goal to drive engagement, conversions, and revenue.
As we discussed earlier, CDPs also come with the added benefit of freeing marketing and data science teams from ownership conflict. The SmartHub CDP, for example, has a certain level of user-friendliness that makes it easy for marketers to run campaigns, test, build segments, and much more, all without the need for engineering involvement. But, data science and engineers can also use their own modeling, data inputs, and other customizations with ease. This promotes cross-team collaboration and better use of customer data to fuel experiences, helping both teams reach their KPIs quicker and more efficiently.
DOWNLOAD THE CDP RFP TEMPLATE
Quickly get started on your Customer Data Platform RFP with this complete template: The 50 Essential Questions you need answered when considering CDP Vendors.
Limitations to marketers: CDP vs. Marketing Automation Platform
Marketing Automation Platform: Marketing Automation Platforms themselves will admit that their software is limited by the quality of your data. Too little data or customer base and the cost will outweigh the benefits, having product or behavioral data that is too complex may limit the system, and having large quantities of unknown customers/users simply won’t work with the mechanics of a Marketing Automation platform. If someone interacts with your site before you capture their email address a Marketing Automation Platform does not record that data on their profile limiting your insights into your customer acquisition.
Additionally, Marketing Automation Platforms are designed to be structured and limited to facilitate ease of use — which works as long as your use cases match the system’s use cases perfectly. If you need flexibility in terms of the type of data you want to access or the way you structure an asset or campaign, you will be limited by the system (cue frustration for more sophisticated marketers). So, Marketing automation is needed, yes, but it’s only 1 part of a larger tech ecosystem you’ll need to succeed. A Customer Data Platform working in conjunction with a marketing automation platform is a great start to a solid tech stack — but now more CDPs, like SmartHub CDPs, are offering all of these functionalities within a single platform, which eliminates lag and data silos while simplifying the marketing process.
CDP: The biggest threat to CDPs is a lack of shared rules, definitions, and categories. Luckily, this is slowly changing as organizations such as Gartner are putting out more guides to navigating (and buying into) the CDP industry. But, businesses should continue to be wary — often, SaaS companies will use the CDP label when it’s convenient, but they really only offer a glorified data solution. It can be difficult to differentiate fact from fiction when it comes to CDPs: that’s why we’ve created our own Smart Guide to CDP RFPs to help you identify what you need in a CDP solution (for free, available to download now).
Overall, marketers don’t need another solution that’s siloed to channel or function and they don’t need just another place to store data — they need a solution to turn that data into a driving force for their business. CDPs can do just that, but even within the Customer Data Platform realm, there are “just ok” solutions and true transformers. One such platform that’s transforming the way marketers work is the SmartHub CDP.
The SmartHub CDP connects applications around a deep customer understanding and uses it to direct interactions in real-time, enabling brands to deliver relevant, connected experiences throughout the omnichannel journey. If you’d like to learn more about what makes our Smarthub CDP different, connect with one of our CDP experts today.