TMW #175 | The CDP is mutating

May 19, 2024

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The CDP is mutating 

CDPs are changing, because they have no choice 

About 2 years ago, I was introduced to the concept of Reverse ETL. It was through Hightouch’s now-infamous essay “CDPs are Dead,” which argued that “CDPs, as we know them, are fundamentally broken” because of the growing sophistication of the data warehouse, which will lead to CDPs pivoting to a “composable, warehouse-first offering, or completely lose relevance in the market.”  

Initially, I was highly critical of the idea that data warehouse-native tech was going to supplant the CDP. After all, wasn’t that why CDPs existed? To make the data from a warehouse and other sources usable? To this day, the CDP Institute makes this very point: 

“The CDP is packaged software providing a full set of functions to build, maintain, and access the customer database. This distinguishes CDPs from data warehouses and data lakes, which are usually custom-built by corporate IT staff or external specialists. The packaged nature of the CDP makes it easier to deploy and change as new needs arise.”

Back in TMW #083, I argued against the idea suggesting that CDPs make data way more usable for the non-technical business user, and that because of this, the data warehouse cannot compete. 

Oh boy, how wrong I was. 

A look back on the industry over the past two years shows just how much has changed. There’s been a small revolution towards CDPs embracing composable architecture, CDPs have become the gateway to data sharing with Adtech platforms, and there’s been a shift towards building more customer experience management features. The CDP has mutated into many different things, becoming something totally other than what it was two years ago. 

What is that something? Let’s find out.


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Want to share something interesting or be featured in The Martech Weekly? Drop me a line at juan@themartechweekly.com.

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