Top Insights from the Forrester Wave: 2024 Customer Data Platforms

Looking for trusted evaluations of customer data platforms? The 2024 Forrester Wave: Customer Data Platform for B2C CDP report offers in-depth insights and ratings of the leading customer data platform (CDP) vendors — a growing technology that connects customer data with customer experiences.

This article breaks down some key findings and trends from the report.

Key Takeaways From The 2024 Forrester Wave

• The Forrester Wave evaluation process gives buyers a reliable assessment of the top 12 customer data platforms, focusing on market presence, strategy, and product capabilities through 29 criteria.
• ActionIQ was named a Leader in the Forrester Wave, for cutting-edge composable integrations with the data warehouse, easy-to-use tooling for marketers and AI-enabled features that boost performance.
• Top priorities for enterprise teams looking for a CDP include “personalization, transforming marketing strategy to accommodate real-time interactions, and integration online and offline interactions.”
• The customer data platform market is booming, projected to grow from $5.1 billion in 2023 to $28.2 billion by 2028, highlighting the need for personalized customer experiences.
• Implementing a CDP improves data quality and enhances marketing effectiveness, leading to significant revenue growth and better customer engagement.

Why the CDP is a Category For the Forrester Wave ™

According to the latest Forrester Wave ™ report, the CDP market has finally arrived. By bringing together a marketer’s need to provide data-driven experiences across the customer lifecycle to the IT and data team’s need to design data infrastructure that is seamlessly integrated and secure.

The customer data platform market is growing, and projected to keep growing from $5.1 billion in 2023 to $28.2 billion by 2028. This explosive growth underscores the increasing demand for personalized customer experiences paired with seamless data integration — from the data warehouse to all of the endpoints and channels that a brand’s customers engage with.

Businesses are investing in CDPs to stay competitive in the changing digital landscape — but not all CDPs have the same underlying infrastructure. Below, we’ll dig into the evaluation and key takeaways.

Understanding the Forrester Wave ™ Evaluation Process

Forrester’s detailed, methodical evaluation process ensures that their report offers the right insight to buyers, with detailed ratings for each category. They assess customer data platforms based on a systematic approach that includes market presence, strategy, and current offering.

Their methodology helps clients make informed purchasing decisions by comparing leading vendors on a level playing field.

Forrester focuses on key aspects of CDPs including data management, audience targeting, journey orchestration, privacy along with the strategy, vision and roadmap of these solutions. This guarantees that Forrester’s insights are complete and relevant — with a comprehensive, forward-looking approach.

Criteria for Evaluation

Evaluating customer analytics technologies based on 29 specific criteria gives Forrester a detailed and nuanced understanding of each vendor’s capabilities. A thorough evaluation process helps Forrester determine which CDPs stand out in the crowded market, providing marketing leaders with the insights needed to make strategic decisions.

Role of Principal Analysts

Principal analysts play a critical role in the Forrester Wave ™ evaluation process. Expert principal analysts bring their extensive knowledge and insights to the table, ensuring that the analysis is both thorough and objective. Their structured methodology and metrics maintain the integrity of the evaluation, significantly enhancing the credibility and relevance of the final report.

Key Findings from the Forrester Wave ™ Report

Forrester categorizes these products on a scale that synthesizes their findings into a scale, including Challengers, Contenders, Strong Performers and Leaders on a scale of weaker to stronger vendors.

Leaders in the CDP Market

The Forrester Wave ™ report evaluated 12 CDP providers, standing out among many existing vendors in the market. These evaluations are based on different aspects of the product, including features, innovation, market strategy, and customer references. Vendors like ActionIQ, are recognized in the report for their unique strengths — leading the CDP market.

For instance, Forrester highlighted the strength of ActionIQ’s Composable CDP in:

• Easy-to-use platform
• AI-enhanced functionality
• Balanced support for marketing and IT
• Native, customer analytics

Other leaders in the category included Treasure Data, Adobe, and Salesforce.

These leaders set benchmarks in the CDP category, guiding potential buyers towards the most effective CDP vendors.

Strong Performers in the CDP Market

Below Leaders are those vendors in the “Strong Performers” category. These vendors have a strong offering but their scores fall short of the Leader category. The vendors included here are Zeta Global, mParticle, BlueConic and Tealium.

Contenders in the CDP Market

Contenders in the report include Redpoint Global, Amperity, Twilio and Microsoft. These vendors received lower scores than the first two categories. No “Challengers” were included in the report.

Trends and Innovations

The Forrester Wave™ highlights shifts in the CDP market, as a nice-to-have to a need-to-have solution for enterprise businesses that are serious about high-performing customer experiences. That means that CDPs have to adapt and scale with enterprise businesses to scale data, with better integrations from the data warehouse to the marketing channels and destinations.

The means by which brands store and compute that data is different — meaning trends like composability and federation are changing the game for brands that want to keep their data in the warehouse. An element of this is the ability to grow and adapt to a changing marketing and tech landscape — offering modularity and adaptability will help CDPs support brands in this endeavor to stay ahead.

Just one example is cookie deprecation — leading CDPs help brands stay ahead by connecting marketing operations to nurture anonymous browsers into loyal customers. Those CDPs that support functionality across the lifecycle will lead the market.

These advancements reflect a new approach in the CDP market, where innovation and development are key to staying ahead. Organizations that embrace these trends are better equipped to harness the full potential of their customer data, leading to improved outcomes and strategic growth.

Why Customer Data Platforms Have “Officially Arrived”

Leading marketers have a CDP in their stack. CDPs access customer data to provide a unified view of the customer that enhances marketing strategies and customer interactions and campaigns. As customer journeys become more and more complex, the importance of CDPs is expected to grow significantly in the coming years.

For marketing leaders, integrating a CDP is not just a strategic advantage but a necessity.

Turn Raw Data into Audiences and Campaigns

With the rise of the data warehouse, leading CDPs have evolved from bringing together different sources of data to tapping directly into the enterprise data warehouse — without requiring data to be for more accurate and comprehensive customer profiles.

When reading the report, take a close look at how each CDP manages customer data. With traditional solutions that copy data out of the warehouse. With new trends like composable, brands don’t need to copy data around — rather, they compute directly at the source, for more secure and efficient data operations with a more complete dataset for better marketing execution.

Growing Customer Engagement

Customer data platforms partner with brands to deliver on CX goals, with a complete view of customer interactions across various touchpoints. Personalized customer journeys and segmentation help marketers launch advertising use cases through increasing lifetime value. Personalization improves conversion rates and customer retention, giving leading brands long-term success.

Real-time data processing capabilities are another essential feature of CDPs, allowing businesses to react instantly to customer actions and preferences. This immediate responsiveness enhances the overall customer experience, making CDPs a valuable tool for marketers aiming to deliver exceptional customer engagement.

Benefits of Implementing a Customer Data Platform

Implementing a customer data platform offers numerous benefits, from improved data integration to enhanced marketing effectiveness. CDPs address significant data management challenges by integrating data and campaigns and providing marketers with a comprehensive view and easy activation of buyer journeys.

Improved Data Quality

Customer data platforms play a crucial role in enhancing the accuracy and completeness of customer data, which is vital for effective marketing strategies. CDPs provide built-in integrations that streamline the incorporation of customer data into marketing strategies, saving time and resources. This detailed and accurate data allows for more precise targeting and personalization in marketing campaigns.

Enhanced Revenue Growth

Customer data platforms drive revenue growth by providing deeper insights into customer behavior. Effective predictive analytics within a CDP can identify new customer segments and engagement opportunities, further boosting revenue. For example, lookalike modeling within CDPs helps identify high-value prospects, significantly increasing average order values.

Real-World Success Stories with CDPs

Real-world success stories demonstrate the effectiveness of customer data platforms in enhancing marketing outcomes.

Several enterprises have achieved remarkable success with Customer Data Platforms (CDPs). B2B organizations are increasingly adopting these platforms to improve marketing effectiveness and customer insights to provide personalized customer services.

For example, brands like e.l.f. Beauty, Atlassian, Albertsons, Hearst and The Washington Post rely on ActionIQ’s Composable CDP to get results, from more efficiency to better CX results, from 131% increase in acquired customers and 5X increase in reach to 71% increase in conversions, 30% increase in repurchase rate and 25% increase in customer lifetime value.

Case Study #1: E.l.f. Beauty Cultivates Brand Loyalists

By partnering with ActionIQ, e.l.f. scales their customer data to drive results.

With ActionIQ, e.l.f. infuses customer journeys with their aggregated first-party data. With more creative ways to gather data from customers, through quizzes and surveys, e.l.f. is able to learn all of these different elements about their shoppers that will connect them to specific products within their product catalog — take skincare, for example. There are all kinds of different customer needs and priorities about their skin. Iis it sensitive, is it oily, are you buying it for your family? There are all kinds of pieces of information that demonstrate where a shopper is in their journey that e.l.f. uses to create audiences based on all of those personalized attributes.

Case Study #2: Atlassian Increase Conversion 71% With a Complete Composable CDP

With 10 terabytes of data and 288 million customers, Atlassian needed a way to harness information swiftly, securely and seamlessly, but there was a gap between their data goldmine and their marketing team’s activation. This led to a customer data platform.

With a customer data strategy that saves time and dollars with the flexibility to grow with the business — the Atlassian team can optimize their resources where it matters and reach a new level of efficiency to power growth, achieving 71% increase in customer conversions with ActionIQ audiences over control. Through granular segmentation of first-party data, they elevated their customer acquisition game, achieving a 5X increase in reach, a 6.7% saving in paid media costs and 50% reduction in RoAS.

Case Study #3: How Saks Uses ActionIQ’s Complete Composable CDP

For leading luxury brand Saks, data is incredibly powerful. It empowers team members across the organization to make decisions that are always smarter and better, through both success and failure. But in order to unlock that data-driven strategy, you need a CDP to democratize and activate that data-driven decisioning and action — from the analytics team all the way to the marketers and beyond.

Saks’s data is all in Snowflake, where it’s managed by Nivy Swaminathan, Vice President of Advanced Analytics and Personalization and her team. They build data science models, predicting outcomes at a user level, and all of that rich data gets written back into their Snowflake data system. ActionIQ mirrors that work to allow marketers access and activation of all of those insights-driven audiences. With ActionIQ, Saks activates audiences in 10 channels (and growing) through integrations, with first-party data as a signal to activate on different platforms.

This user friendly approach proved to be successful for Saks, providing them with improved access to their marketing.

The Future of the CDP Market is Bright

The future of the CDP market is bright, driven by advancements in technology and increasing market demands for personalized, real-time data solutions. Analysts predict that the adoption of CDPs will continue to rise as businesses recognize the importance of integrated customer data for strategic decision-making.

Overall, the CDP market is projected to maintain its growth trajectory, ensuring its relevance and importance for years to come.

Emerging Technologies

Emerging technologies such as AI and machine learning are set to revolutionize customer data platforms. These innovations enhance data processing and analytics capabilities, allowing organizations to better manage customer data and improve marketing strategies. Scalability is another essential feature of new customer data platforms, designed to support business growth and adaptability.

Integrating these emerging technologies allows CDPs to offer a new approach to managing customer data, addressing the challenges of the digital marketing landscape.

Predicted Market Trends

The trend towards automation in marketing is expected to rise, leading to more streamlined processes in managing customer data and targeted advertising. This shift will allow marketers to focus on strategic initiatives, leveraging automated insights for better decision-making. As the CDP market evolves, it will continue to drive innovation and enhance marketing outcomes.

Market trends indicate an increased demand for personalization and real-time data solutions. These advancements will push the CDP market towards further innovation and enhancement, ensuring that customer data platforms remain a cornerstone of effective marketing strategies.

Summary of The 2024 Forrester Wave

In conclusion, the Forrester Wave ™ report for 2024 provides critical insights into the evolving landscape of customer data platforms. CDPs are essential for modern marketing, offering solutions to data silos, enhancing customer engagement, and driving revenue growth. By understanding the evaluation process, key findings, and future trends, businesses can make informed decisions about implementing CDPs. Embracing these platforms will undoubtedly lead to more effective marketing strategies and improved customer experiences.

Frequently Asked Questions About the Forrester Wave

What are the primary criteria used by Forrester to evaluate CDPs?

Forrester primarily looks at data quality, user interaction features, advanced analytics capabilities, and overall market strategy when evaluating CDPs. So, if you’re considering a CDP, make sure it excels in these areas!

Who are some of the Leaders in the CDP market according to the Forrester Wave™ report?

According to the Forrester Wave™ report, strong performers in the CDP market include ActionIQ, Adobe, Salesforce, and Treasure Data each bringing unique strengths to the table.

How do CDPs enhance customer engagement?

CDPs enhance customer engagement by offering a comprehensive overview of customer interactions, which allows for personalized marketing strategies that boost both revenue and customer retention. It’s all about connecting with your customers in a way that truly resonates with them.

What are some real-world examples of successful CDP implementations?

Successful CDP implementations are seen with e.l.f. Beauty boosting personalization to grow lifetime value, Atlassian using a Composable CDP to increase efficiency through secure data integration, and Saks launching predictive campaigns that win. These examples highlight how CDPs can transform customer engagement and drive business growth.

What future trends are expected in the CDP market?

Expect to see more automation, a growing need for personalization, and real-time data solutions in the CDP market, along with the rise of AI and machine learning. These trends will shape how businesses understand and engage with their customers.