The 30+ most important CDP market stats to know in 2023

In 2023, data-driven enterprises will continue to lead their industries by integrating and unifying customer data for activation. Doing so from all available sources using a Customer Data Platform (CDP) drives a strategic approach that enables relevant and meaningful customer experiences while creating enterprise value.

As the new year approaches and the end of cookies (in 2024) inches closer, here are the most important CDP market stats and trends you need to know — all in one place.

On Customer Data Platforms (CDP) and first-party data

• About 92% of senior marketing executives agree that first-party data is more valuable than ever due to impending the end of third-party cookies.

Lytics’ own research provides insights about this change:

• Most brands are not confident in their ability to, or prepared to, adjust from using third-party cookies to a first-party data strategy.
• About 36% of marketers think there is no first-party data they can access to support the end of third-party cookies.
• Around 40% of marketers admit their campaign efforts are completely reliant on third-party cookies.
• Nearly 50% say that the end of third-party cookies will substantially and negatively impact their marketing return on investment (ROI).
• 71% of brand managers have difficulty maintaining an accurate customer profile over time.
• Of the businesses that collect first-party data, only 44% can gather the data and leverage its use with a CDP to gain insight about customers.

Here’s what else is going on in the space.

• Consumer businesses (both B2C or B2B2C) are increasing their CDP deployments. In 2017, 10% of these companies were deploying a CDP, but in 2021, 24% were deploying one.
• By 2024, 80% of CIOs surveyed will list modular business redesign through composability as one of their top-five reasons for accelerated business performance. (Gartner)
• CDP market revenues increased by 25% from 2021 to 2022, to $2 billion. If the same trend continues, 2023 revenues will increase to $2.5 billion.
• The average enterprise has 900 applications. However, only 28% of the apps integrate with a CDP system to capture and analyze customer data.
• 63% of retailers use a CDP for their customer-personalization program, which is more than any other technology.
• According to CDP Institute, primary use cases for CDP include – acquisition (57%), customer value (65%), and retention (61%).
• One brand using a CDP and AI-based segmentation has achieved a 7x ROI in five months following implementation, 18% conversion rate increase using personalized banners, and almost 40% increase in return on ad spending (ROAS). (IDC)
•  Recent IAB data shows that only 60% of CDP users are satisfied with the technology’s ability to meet their business needs (likely not due to lack of capability, but lack of flexibility and trouble maximizing the investment.

On MarTech, AI, and their value

• 78% of marketers feel that real-time data is a “must-have.”
• Sixty-seven percent are overwhelmed by the volume of marketing data (Adverity, 2022, Recession, Resilience & Marketing Data)
• Over 70% of marketers say their IT teams control access to their data, and that they rely on the IT teams for data modeling
• The newest innovation in MarTech is Composable CDP. Composable CDPs allows enterprises to grab data from any channel or touchpoint, create a unified customer profile, and load data efficiently to the data warehouse in a standardized format useful for analytics and modeling.
• 65% of marketers surveyed agree that AI will do the repetitive work of targeting ads.
• 51% say AI is critical to their marketing efforts over the next year.
• 81% of consumers like getting personalized recommendations and favor the use of AI to do this.
• In 2021, 96% of enterprises adopted a “digital first” strategy, which often included the implementation of a CDP.
• A McKinsey study found that companies with a CMO who works closely with the IT department on processes and tooling are more successful in reaching the goal of growing revenues by more than 10% a year.

On the evolving role of IT and data teams

• Seventy-seven percent of business leaders agree that the CIO role will continue to have heightened visibility due to the state of the economy
• Another 38% see the CIO as a strategic advisor, able to identify needs and opportunities when it comes to digital and business transformation

On the state of identity resolution

• Although 84% of businesses today agree that recognizing their customers across channels and over time is extremely important, only one-third of consumers are confident that businesses can repeatedly recognize them online.
• Even your most loyal customers likely have at least six different identities within your marketing system, according to Marketing Profs. Some audience members could even have over 100.
• Most enterprise CDP users (75%) said loading data from all sources and resolving customer identities (57%) were the two most important CDP capabilities.

On achieving a Customer360 view

Truly knowing your customers is critical.

• 42% of CMOs say their teams are using 14 or more data sources. (Adverity, 2022)
• 80% of customers say their experience with a brand is more important than the product or service.
• Of those who have attempted a C360 strategy, only 14% of organizations have successfully achieved a 360-degree view of the customer.
• 61% of young American adults under 25 completed a purchase on social media without leaving the website or app. However, only 10% of all American online adults feel they can trust social media with personal data, and only 15% are willing to make a purchase.
• The common needs for all marketers are to have updated customer profiles with relevant information. This information usage requires customer consent. Marketers want to identify data groups with similar traits, choose what messages to deliver, and when and how to measure performance results.
• Capgemini reports that only 45% of marketers feel they have a CDP that provides a unified view of their customers.
• The top benefits of CDP cited by senior executives are a 360-degree, unified customer view (88%) and the ability to conduct advanced analytics (54%).
• Adweek and Accenture reported that 80% of brands feel they deliver superb customer experiences. Only 8% of their customers agree.

On the state of data clean rooms

Failure to get the most out of data clean rooms is costing marketers money. Despite the potential and widespread use of data clean rooms, less than one-third of marketers are leveraging their full capabilities. According to 2023 data from IAB via MarTech:

• Forty-seven percent of marketers are using clean rooms for data privacy, regulatory compliance and audience activation
• But 52% of DCR users say they are challenged when it comes to leveraging results and proving ROI
• Only 27% are taking advantage of data clean rooms’ attribution and ROI/ROAS measurement capacity, media/marketing mix modeling, or propensity modeling.

Why knowing the market matters

The main challenges for 2023 are overcoming data silos to collect more useful data and getting permission from customers to use their data. An organization must earn consumers’ trust, as 20% of consumers feel that AI runs the risk of creating a negative customer experience. Regardless of the challenges, the benefits of CDP far outweigh the disadvantages, and an understanding of the market, your CDP options, and the value of a CDP is essential for the success of scaling, data-driven enterprises. With Lytics, brands have a means to use first-party data to identify and engage targeted audiences with ads that address their unique needs (saving our customers as much as 40 cents on every dollar).

Last update February 27, 2023. Check back every so often for new updates to this blog post.