CDP market to grow 250% to $6bn as take-up soars

The customer data platform market is set to grow 250% over the next five years – from $1.7bn (£1.4bn) in 2022 to $6bn (£4.8bn) globally – with AI-based services key to unifying multiple data sources on a single platform; reducing siloed data and centralising business access to customer data.

So says a new Juniper Research report, Customer Data Platforms: Key Strategies, Competitor Leaderboard & Market Forecasts 2022-2027, which predicts that the retail and ecommerce sector will represent 35% of global CDP revenue this year.

The report reveals that online competition is driving business demand for in-depth customer insights and urges CDP providers to develop new services that cater to online retailers to create more efficient personalisation services.

It also calls for CDP giants, including Oracle, Salesforce and Tealium, to increase the breadth of integrations with third-party vendors, such as relationship management platforms, for greater access to user data.

Meanwhile, the report highlights the ability of CDPs to merge different data sources using AI as critical to unlocking more granular user insights to inform highly targeted marketing campaigns, enable greater personalisation and increase return on advertising spend.

Report co-author Charles Bowman commented: “The breadth of high-value services supported by Oracle’s Unity CDP, including real-time management of data, ability to unify data sources and predictive analytics, are key to differentiating the platform from its competition. As a result, we expect Oracle’s Unity CDP to be in high demand for personalisation services.”

The study supports a report published earlier this year by Twilio Segment, which showed that the Covid pandemic has triggered a massive rise in the adoption of CDPs as businesses build digital-first customer engagement strategies and slash their reliance on third-party online data.

At the time, Twilio Segment VP of marketing Katrina Wong said: “Companies have been confronted with two major challenges – evolving their tech stack to deliver world-class customer engagement, and adapting to stricter privacy regulations that force companies to rebuild their existing data strategies, but still offer personalised experiences.

“CDPs are now mission-critical because they offer access to great, accurate, and compliant first-party data, enabling companies to not only compete, but thrive, in a digital-first world.”