Composable CDPs (customer data platforms) are trending. But is the buzz worth the hype? In this article, I explore Amperity’s view on the opportunity while unpacking some considerations for brands to be mindful of before deciding to hop on the trend.
In the fast-paced world of retail, European brands are constantly on the lookout for innovative solutions to enhance customer experiences, streamline operations and drive growth. This pursuit has become especially critical, with Europe teetering between inflation and recession, causing many households to spend less. Considering this dynamic landscape, the emergence of composable CDPs has garnered significant attention as a potential game-changer. But are they worth the hype? Let’s break it down.
Unpacking the ‘composable’ CDP buzz
The reality is that a brand’s customer data infrastructure is inevitably a combination of tools and systems that have to be co-ordinated together. Think of it this way: Your CDP encompasses all the systems in your toolkit designed to assist employees in catering to customers along with the infrastructure needed to seamlessly connect these systems and bring them to life.
Unquestionably, you will require a set of systems that work together in that infrastructure. Brands, for instance, have eCommerce platforms, customer support tools, content management systems and marketing activation systems, to name a few. This is because, at least at this point in time, there is no one system that will do all of these things.
Consequently, it’s only logical that your CDP must also be composable because it must connect to all of your other systems and fuel them with great data. At the same time, it has to consume data from all of your various systems to build a unified customer view.
So the real question here isn’t, “Should my CDP be composable?” or “Should I buy packaged or composable?” – it’s, “What is my infrastructure missing that’s preventing me from getting the most value out of it?” and, “How can I build it with the smallest number of tools?”
In that sense, the current view of composable CDP takes a very narrow view of composability. Its focus is confined to a problem, which could be described as either:
- Questions surrounding how I can build my own CDP in my data warehouse or big data environment
- The data is right in my data warehouse, and all that’s missing is the connection between it and my other systems
Just as the term CDP turned from a real description of a problem (“I need a unified view of my customer”) to a marketing term, encompassing an array of products that failed to address the root challenge, the notion of a composable CDP has similarly undergone a transformation. It has shifted from a real description of a problem (“I need the unified view to power my whole tech stack”) into a marketing term for a disparate set of products (ETL, reverse ETL, identity) that also do not solve the problem.
Composable CDP: A distraction from the real problem
Simply stated, the problem is that brands lack a unified customer view. They have the information needed to create this view, which is increasingly stored in cloud-based data storage. These brands also use systems that can make use of this information to gain insights and create value in new ways. However, due to market shifts, these systems need to work together more closely, smoothly integrating within the day-to-day operations.
This is a significant change from the past as, traditionally, these systems were largely disconnected. The data warehouse was the domain of IT and internal analytics and used for internal reporting and planning as well as transactional accounting. For the most part, marketing systems relied on data from third-party providers (Axiom, Merkle, Neustar) or captured from customer engagement, with a small set of data fuelling “CRM marketing” coming from the IT systems.
Most brands are making some obvious choices as they experience this transition:
- They are moving from legacy data platforms to a modern, cloud scale data platform. This is saving them time and money while giving them more flexibility to store data of all types, including customer data. They are benefiting from the new models of application development, data sharing, control and flexibility that has come with this transition.
- They are moving from siloed legacy eventing systems as well as tracking systems tied to the third-party cookie to server-side event routers. This, again, is saving them time and money while providing them the flexibility to route events across systems to provide great experiences for customers who increasingly engage across channels and expect to be known.
Brand experience gap
As brands do this, however, they recognise that they still have the gap – the core root problem: They lack a unified customer view.
Brands experience this in a few ways:
- Identity resolution: Brands are unable to know customers beyond just who they are like what they do in the brand.
- Insights: Brands lack basic insights about the customer related to identity, due to the complexity of data schema across their different systems.
- Access: Whatever view brands do have, even though it is in a general-purpose cloud data warehouse, it is not accessible to all the people and systems in the organisation. This is, partially, because each of these systems needs a different view of the customer depending on role, permission set and use case.
- Speed: Brands are unable to make changes to meet the organisation’s needs as it evolves, grows and adapts. This is largely due to a combination of the speed to get insights as well as the ability to react to those. In other words, how much time does it take for an insight from an analyst to hit marketing? Or how much time does it take to fuel a new system with unified customer data?
The journey to true composability
The next step these brands typically take is to try to solve that problem in one of these two systems, either by “building the unified view in their event router” (Segment is my CDP) or “building the unified view in their data warehouse” (composable CDP). We won’t go into detail on the challenges with the first one here. Instead, let’s continue to focus on “composable CDP”.
Today’s “composable CDP” has a significant challenge. Basically, none of these vendors solve the problems that drive the need for “doing more than the data warehouse”. These vendors only solve the “reverse ETL” problem; specifically, “If the data is correct in your data warehouse and all of the access, workflow management and change management problems have been solved, and the only problem left to solve is getting the data out to downstream systems, then we’ve got you covered”. However, all of those “ifs” are the problem. Reverse ETL fails the basic challenge – it does not help to build a unified customer view at the centre of your brand.
So that leaves brands on their own to solve the rest of the problems on their own: How do I solve identity? How do I gain insight? How do I provide the right access? And how do I do this all quickly at the lowest cost?
The real solution to composability is to introduce a platform that solves the problem is a platform designed:
- From the ground up to be composable, working seamlessly with your data warehouse, event router and all of your existing systems
- To be flexible, providing you with full control and customisation, allowing you to pick the systems you want to use and where you want to plug them in
- For power, speed and control, where you are the operator and can build with that platform alongside your other systems
That’s why we built Amperity. Amperity delivers true composability focused on the core problem – the need for a unified customer view at the centre of your brand. Unlike other so-called composable CDP solutions, Amperity works with any big data environment, including Snowflake, DataBricks, RedShift, Synapse/Fabric, BigQuery and others. And it works with any event router, whether that’s Segment, mParticle, MetaRouter, AEP or others.
Amperity works with your existing systems, and it’s ‘future-proofed’ for the new world of AdTech. It builds a view based on your data with patented identity resolution and allows you to enhance that with a broad range of third-party data offerings. And Amperity accomplishes all of this with superior quality, at a lower cost and in a quicker timeframe than if you were to build it yourself by buying point solutions.
For genuine composability, invest in the only CDP that was built from the ground up to be a platform for customer data, with true composability to power all of your systems with a unified view of the customer.
Amperity delivers the data confidence brands need to unlock growth by truly knowing their customers. With Amperity, brands can build a first-party data foundation to fuel customer acquisition and retention, personalise experiences that build loyalty, and manage privacy compliance. Using patented AI and ML methods, Amperity stitches together all customer interactions to build a unified view that seamlessly connects to marketing and technology tools. More than 400 brands worldwide rely on Amperity to turn data into business value, including Alaska Airlines, DICK’S Sporting Goods, Endeavour Drinks, Planet Fitness, Seattle Sounders FC, Under Armour and Wyndham Hotels & Resorts. For more information, visit amperity.com or follow us on
