Customer Data Platforms, the state of European CDPs

Customer Data Platforms are getting a lot of attention amongst data-driven marketers. If you are not familiar with the CDPs, the important points to know is that they ingest customer data from many source systems and combine it into a unified customer database that is open for use and connects to other systems.

Originally CDPs are intended to be run largely by marketing departments with less need for IT support.

As such CDPs have a great deal to offer and that might explain the buzz. Leaves you to wonder, how big is this industry now? David Raab Founder and CEO of Customer Data Platform Institute just published a market research on the CDP Industry in Europe, so we grabbed the opportunity to look into that and ask his views.

CDP Market growth and local vendors

From a buyer’s perspective, the most interesting stat from the EU CDP industry report, may be the absolute number of local vendors available. We found 25 Europe-based CDP vendors, nearly one-third of the worldwide total. Marketers in UK, France, or The Netherlands can each pick from a half dozen vendors based in their country.

This matters because markets still have considerable national differences. I suspect that many buyers prefer to work with a local firm, especially for customer-facing functions such as personalization where knowledge of local buyers is important.

Buyers may also be interested in the market growth rate:

  • The number of European vendors doubled, from 13 to 25 during 2018.
  • Employment at CDP vendors grew by 58% from 929 to 1,469.
  • Cumulative funding grew by just 16%, suggesting that most growth is self-funded.

The total revenue among these vendors is estimated at €150 million in 2018. Revenue in Europe for non-European vendors is probably about equal to this.

What are the different CDP types?

It might be good to first illustrate the three categories of CDPs we differenciate in the report. The image below shows the incremental scope of Data Access, Analytics and Campaign CDPs. Note that there are even great variations among vendors within each category.

customer data platform CDP types analytics data campaign

  • Data Access type CDP
    These systems gather customer data from source systems, link data to customer identities, and store the results in a persistent database available to external systems. This is the minimum set of functions required to meet the definition of a CDP. Systems in this category often employ specialized technologies for data management and access. Many began as tag management or Web analytics vendors and have considerable legacy business in those areas.
  • Analytics type CDP
    These systems provide data assembly plus analytical applications. The applications usually include customer segmentation and sometimes extend to machine learning, predictive modeling, revenue attribution, and journey mapping. These systems often automate the distribution of segment lists to marketing automation or advanced analytics products.
  • Campaign type CDP
    These systems provide data assembly, analytics, and customer treatments. These treatments may be personalized messages, real time interactions, product or content recommendations, outbound marketing campaigns, customer journey orchestration, or other contacts. What distinguishes them from segmentation is they also specify the message to be delivered.

Here is a list of the european CDP vendors included in the report. With the country of origin and CDP type.

CDP NameCountryCategory
Camp de BasesFrancecampaign
Jahia / UnomiSwitzerlandcampaign
OmnisientSouth Africaaccess
Piwik ProPolandcampaign

What are the CDP differences from country to country?

It’s a bit hard to say about country differences because there are probably quite a few firms we don’t know about. For example, I’m aware of only one German CDP, which just seems very unlikely. And although our figures show that Netherlands-based companies are especially small, the reason could simply be that we have been more exposed in The Netherlands than elsewhere and thus are more likely to learn about small companies in that market.

The differences between EU and the World are clearer.
Seventy percent of European CDP employees work at companies with campaign-type systems, meaning they can select messages for individuals in batch campaigns or one-on-one interactions. Just 43% of employees outside of Europe work at similar firms.

The domination of the European industry by campaign type Customer Data Platforms is its most distinctive feature. I suspect that European marketers prefer campaign systems because European marketers have fewer technical resources than their counterparts in the U.S.

Campaign systems help European marketers stretch their budgets because they include a broader range of features than other types of CDPs, reducing the need for additional products.

Are there other differences beyond campaign type?
Yes. European CDP companies are much smaller and less well-funded than those outside of Europe: the average European company has 59 employees and €6 million funding, while the average company elsewhere has 99 employees and €25 million funding.

Averages can be deceiving but other measures tell a similar story. For example, only one of the ten largest CDPs is based in Europe compared with five of the ten smallest. The difference is actually greater than this suggests because most of the large European CDPs are old companies – four of the six with over 100 employees were founded before 2006.

By contrast, just one of the fourteen non-European vendors with over 100 employees is that old. This means that the largest European CDPs built their business doing something else – mostly as marketing services agencies — while the largest non-European CDPs were CDPs from the start. (You’d need to look at the data in our global industry update, available here, for the non-European information.)

CDP trends to predict the future

We assemble this data every six months so we get a good perspective on changes over time. The European CDP industry had been growing slightly faster than the rest of the world but in the recent period that was not the case: the European share of employment actually fell slightly.

Another trend that had been clear was the steady shift of industry away from access vendors towards campaign vendors. But that also slowed during the most recent period and actually reversed outside of Europe, where analytics vendors gained share. This reversal suggests that different types of CDPs are finding success among different customer groups.

The industry is not going to coalesce around a small number of vendors with similar features any time soon. That is different from the path that most industries take, where a dominant model and few leaders do tend to emerge fairly quickly.

Data on industry concentration points in a similar direction: the share of employment among the top five vendors has fallen steadily over the past two years, and even the share of the top 20% of vendors (a number that increases as the industry grows) fell in the most recent period.

Overall, the report shows a vibrant, innovative European CDP industry that continues to grow by taking approaches that fit the special conditions of the European marketplace. U.S.-based firms, with much higher funding and a substantial technical head start, will not leave the market any time soon. But because the non-European firms are strongest in the data access and analytics categories, we see both sets of vendors coexisting and often even being used for different purposes within the same company.

Readers can download the European report here.

About David Raab

David Raab is CEO and Founder of the Customer Data Platform Institute an organization that educates marketers about customer data management and technology. Mr. Raab has a long history as a marketing technology industry consultant and analyst. He coined the term Customer Data Platform in 2013.

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