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Should you build or buy a customer data platform?

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Should you build or buy a customer data platform?

“Build versus buy” in the context of technology marketplaces is a long-running debate. At Real Story Group, we see this debate getting revisited for marketing tech stacks, particularly for customer data platforms (CDPs).

Is there a single right approach? I don’t think so, but the details matter here.  So let’s dig in.

Build vs. buy

Traditionally, two main approaches for obtaining enterprise functionality have been:

  1. Buying an off-the-shelf package and then customizing it for specific needs.
  2. Building a platform in-house, specifically for your requirements, sometimes via packaged piece parts.

Both approaches have valid rationales, and over the past two decades as an industry analyst, I’ve seen this choice emerge in pretty much all technology marketplaces. However, the boundaries between build and buy in CDPs can become fuzzier.

Part of the challenge is that packaged CDPs can vary substantially in scope. Some have great vertical depth, reaching back into the enterprise to perform upstream data processing or extending forward to the engagement tier to provide real-time interaction. Some packaged CDPs offer lateral services around orchestration, campaign management and even outbound messaging.

So before deciding on the right approach, it is important to answer what a CDP will do specifically for your enterprise.

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What does a CDP do (for you)?

Should you build or buy a customer data platform
RSG’s enterprise service model for customer data.  Source: Real Story Group

The model shows different stages in a data life cycle, regardless of specific technology platform. Your customer data probably goes through all these stages:

  1. You need to obtain data from various online and offline data sources before you can do anything with it. Therefore, you need some mechanism to ingest data, clean it, perform some transformations and aggregation, and ensure quality.
  2. Once the data is collected or ingested from different sources, you need to tie it to user profiles. That includes activities such as identity resolution and profile unification. You also enrich your profiles with additional data while ensuring data governance and compliance.

In a larger organization, these two initial phases typically transpire within part of a broader enterprise data “fabric” or “mesh.” The typical enterprise already possesses data management tooling to handle these services – like data lakes, warehouses, ETL tools, quality and governance, etc. – and applies them to customer data. However, as we’ll see below, many packaged CDP tools also provide some of these services. In any case, enterprise IT and Data teams become important stakeholders in these first two stages.

  • The next stage is where you use all this cleaned-up, aggregated, unified profile data for your business objectives. For example, now that you have profiles or 360-degree views of your users or customers, you can segment them based on different attributes. You can slice and dice the profiles, create cohorts, group similar data, create audiences and so forth – and then, critically, activate that data through various channels.
  • This stage is the last mile where you engage with your customers via e-commerce, email, web, mobile, chat or other channels, using personalized content and product recommendations.

You see considerably higher marketing and customer experience teams’ involvement in these latter two stages.

In theory, all these services can be potentially addressed by a CDP. You will often find CDP vendors boasting they can perform all these stages equally well.

In practice, though, we see several variations of this model. See, for example, the different scopes for Company A, B and C in the diagram. Rarely do large, complex enterprises deploy a single platform for all these stages. There are at least two reasons for that:

  1. As you can see, the overall potential functionality is quite broad, and large enterprises already have existing initiatives outside of CDP for several of the stages (or functionalities within those stages) identified above. These functionalities often include data pipeline management, machine learning ops, and identity resolution, to name just a few.
  2. Despite what vendors claim, the truth is they are never equally good at all these stages. They can usually do only one or two of these stages well.

Therefore, where a CDP fits in your martech stack could differ from where it fits for another company. This then affects any build versus buy decision since the question initially becomes: build or buy precisely what? Even if you license an off-the-shelf CDP for some functionality within the model above, you will likely build extensions for missing capabilities.

So the first lesson: you will likely do some build and some buy, regardless of the overall strategy. The question then becomes: in what proportions?


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Assembling from piece parts

One approach potentially open to you is assembling components to build CDP capabilities instead of developing from scratch or buying a more wide-ranging, general-purpose CDP off-the-shelf.

This approach has some appeal because you may already possess some powerful data management capabilities as part of your broader customer data fabric.

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You can also license specific products for these different functionalities. Several vendors offer components for such functionality. For example:

  • Data ingestion: There are specialized data ingestion vendors and modules from CDP vendors themselves. Vendors such as Stitch (acquired by Talend), Snowplow, Fivetran, Matillion and others provide modules for data ingestion, data pipeline management, transformations and other relevant functionality.
  • ETL and ELT: Many vendors target Extract-Transform-Load (ETL), Extract-Load-Transform (ELT) and Reverse-ETL/ELT for different types of transformations that you can do with your raw data. Examples of vendors in this category are Hevo Data, Hightouch, DBT and Census.
  • Data warehouses and Data Lakes: Several data warehouses and data lakes, including Snowflake, Google and others, include data management and processing functionality. Many packaged CDP architectures already assume that source data will come from this environment.
  • “Virtual” CDPs: Some vendors, such as Aqfer, Rudderstack, and some other players, offer some services for cobbling together a CDP with a decoupled data layer.
  • Identity Resolution: Several vendors target identity resolution. Many CDPs have now given up their own identity resolution efforts instead of partnering with vendors such as Neustar, Infutor,  LiveRamp, and others.
  • Engagement: The marketplace for engagement-oriented products remains quite vibrant. You can find many point solutions that target journey orchestration, campaign management, personalization, recommendations and other engagement use cases. Several packaged CDPs are also strong in this area.

This isn’t an exhaustive list of services, and you can find many other specialized vendors (e.g., those providing governance solutions). The key point is that it is possible to assemble these services to have a composable data ecosystem instead of doing everything using a single CDP.

Read next: Deep changes in the CDP space

What you might miss

By now, you’ve probably figured out that a couple of key CDP services are missing from that list above: business-friendly segmentation and activation. These are more challenging capabilities to purchase off the shelf, and at RSG, when we’ve seen home-grown CDPs, typically, the enterprise will build these business-user interfaces from scratch. When we hear enterprise developers arguing, “let’s just employ our data warehouse as the data layer instead of a CDP,” this is typically where they are headed.

I would caution you about this approach, though, because custom segmentation and activation tooling could prove fragile, and advanced UX design is a big part of what you pay for in a CDP (though to be sure: not all CDPs are equally good at this).

What you should do

Recognize that your CDP effort will undoubtedly include some measures of both build and buy. It’s just a question of proportion and location. Even if you license a packaged CDP – and there are good reasons to do so – you will need ample development work to stitch it into the rest of your customer data fabric, let alone your front-line engagement systems.

The jury remains out on a single best approach for this, but design patterns are emerging. Consult this briefing for more details.

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In the meantime, as you look to build your customer data management muscles over the next year, keep your data scientists close but your developers even closer.

Customer data platforms: A snapshot

What they are. Customer data platforms, or CDPs, have become more prevalent than ever. These help marketers identify key data points from customers across a variety of platforms, which can help craft cohesive experiences. They are especially hot right now as marketers face increasing pressure to provide a unified experience to customers across many channels. 

Understanding the need. Cisco’s Annual Internet Report found that internet-connected devices are growing at a 10% compound annual growth rate (CAGR) from 2018 to 2023. COVID-19 has only sped up this marketing transformation. Technologies are evolving at a faster rate to connect with customers in an ever-changing world.

Each of these interactions has something important in common: they’re data-rich. Customers are telling brands a little bit about themselves at every touchpoint, which is invaluable data. What’s more, consumers expect companies to use this information to meet their needs.

Why we care. Meeting customer expectations, breaking up these segments, and bringing them together can be demanding for marketers. That’s where CDPs come in. By extracting data from all customer touchpoints — web analytics, CRMs, call analytics, email marketing platforms, and more — brands can overcome the challenges posed by multiple data platforms and use the information to improve customer experiences. 

Read next: What is a CDP and how does it give marketers the coveted ‘single view’ of their customers? 

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Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here.


About The Author

1644511373 403 Should you build or buy a customer data platform
Apoorv Durga is Vice-President, Research & Advisory at analyst firm Real Story Group, where he covers CDPs, e-commerce, Web CMS, and technologies. He is a two-decade veteran in the marketing technology space.


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How To Combine PR and Content Marketing Superpowers To Achieve Business Goals

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A figure pulls open a dress shirt to reveal the term PR on a Superman-like costume, reflecting the superpower resulting from combining content and PR.

A transformative shift is happening, and it’s not AI.

The aisle between public relations and content marketing is rapidly narrowing. If you’re smart about the convergence, you can forever enhance your brand’s storytelling.

The goals and roles of content marketing and PR overlap more and more. The job descriptions look awfully similar. Shrinking budgets and a shrewd eye for efficiency mean you and your PR pals could face the chopping block if you don’t streamline operations and deliver on the company’s goals (because marketing communications is always first to be axed, right?).

Yikes. Let’s take a big, deep breath. This is not a threat. It’s an opportunity.

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Reach across the aisle to PR and streamline content creation, improve distribution strategies, and get back to the heart of what you both are meant to do: Build strong relationships and tell impactful stories.

So, before you panic-post that open-to-work banner on LinkedIn, consider these tips from content marketing, PR, and journalism pros who’ve figured out how to thrive in an increasingly narrowing content ecosystem.

1. See journalists as your audience

Savvy pros know the ability to tell an impactful story — and support it with publish-ready collateral — grounds successful media relationships. And as a content marketer, your skills in storytelling and connecting with audiences, including journalists, naturally support your PR pals’ media outreach.

Strategic storytelling creates content focused on what the audience needs and wants. Sharing content on your blog or social media builds relationships with journalists who source those channels for story ideas, event updates, and subject matter experts.

“Embedding PR strategies in your content marketing pieces informs your audience and can easily be picked up by media,” says Alex Sanchez, chief experience officer at BeWell, New Mexico’s Health Insurance Marketplace. “We have seen reporters do this many times, pulling stories from our blogs and putting them in the nightly news — most of the time without even reaching out to us.”

Acacia James, weekend producer/morning associate producer at WTOP radio in Washington, D.C., says blogs and social media posts are helpful to her work. “If I see a story idea, and I see that they’re willing to share information, it’s easier to contact them — and we can also backlink their content. It’s huge for us to be able to use every avenue.” 

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Kirby Winn, manager of PR at ImpactLife, says reporters and assignment editors are key consumers of their content. “And I don’t mean a news release that just hit their inbox. They’re going to our blog and consuming our stories, just like any other audience member,” he says. “Our organization has put more focus into content marketing in the past few years — it supports a media pitch so well and highlights the stories we have to tell.”

Storytelling attracts earned media that might not pick up the generic news topic. “It’s one thing to pitch a general story about how we help consumers sign up for low-cost health insurance,” Alex says. “Now, imagine a single mom who just got a plan after years of thinking it was too expensive. She had a terrible car accident, and the $60,000 ER bill that would have ruined her financially was covered. Now that’s a story journalists will want to cover, and that will be relatable to their audience and ours.” 

2. Learn the media outlet’s audience

Seventy-three percent of reporters say one-fourth or less of the stories pitched are relevant to their audiences, according to Cision’s 2023 State of the Media Report (registration required).

PR pros are known for building relationships with journalists, while content marketers thrive in building communities around content. Merge these best practices to build desirable content that works for your target audience and the media’s audiences simultaneously.

WTOP’s Acacia James says sources who show they’re ready to share helpful, relevant content often win pitches for coverage. “In radio, we do a lot of research on who is listening to us, and we’re focused on a prototype called ‘Mike and Jen’ — normal, everyday people in Generation X … So when we get press releases and pitches, we ask, ‘How interested will Mike and Jen be in this story?’” 

3. Deliver the full content package (and make journalists’ jobs easier)

Cranking out content to their media outlet’s standards has never been tougher for journalists. Newsrooms are significantly understaffed, and anything you can do to make their lives easier will be appreciated and potentially rewarded with coverage. Content marketers are built to think about all the elements to tell the story through multiple mediums and channels.

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“Today’s content marketing pretty much provides a package to the media outlet,” says So Young Pak, director of media relations at MedStar Washington Hospital Center. “PR is doing a lot of storytelling work in advance of media publication. We (and content marketing) work together to provide the elements to go with each story — photos, subject matter experts, patients, videos, and data points, if needed.”   

At WTOP, the successful content package includes audio. “As a radio station, we are focused on high-quality sound,” Acacia James says. “Savvy sources know to record and send us voice memos, and then we pull cuts from the audio … You will naturally want to do someone a favor if they did you one — like providing helpful soundbites, audio, and newsworthy stories.”  

While production value matters to some media, you shouldn’t stress about it. “In the past decade, how we work with reporters has changed. Back in the day, if they couldn’t be there in person, they weren’t going to interview your expert,” says Jason Carlton, an accredited PR professional and manager of marketing and communications at Intermountain Health. “During COVID, we had to switch to virtual interviewing. Now, many journalists are OK with running a Teams or Zoom interview they’ve done with an expert on the news.”

BeWell’s Alex Sanchez agrees. “I’ve heard old school PR folks cringe at the idea of putting up a Zoom video instead of getting traditional video interviews. It doesn’t really matter to consumers. Focus on the story, on the timeliness, and the relevance. Consumers want authenticity, not super stylized, stiff content.”

4. Unite great minds to maximize efficiency

Everyone needs to set aside the debate about which team — PR or content marketing — gets credit for the resulting media coverage.

At MedStar Washington Hospital Center, So Young and colleagues adopt a collaborative mindset on multichannel stories. “We can get the interview and gather information for all the different pieces — blog, audio, video, press release, internal newsletter, or magazine. That way, we’re not trying to figure things out individually, and the subject matter experts only have to have that conversation once,” she says.

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Regular, cross-team meetings are essential to understand the best channels for reaching key audiences, including the media. A story that began life as a press release might reap SEO and earned media gold if it’s strategized as a blog, video, and media pitch.

“At Intermountain Health, we have individual teams for media relations, marketing, social media, and hospital communications. That setup works well because it allows us to bring in the people who are the given experts in those areas,” says Intermountain’s Jason Carlton. “Together, we decide if a story is best for the blog, a media pitch, or a mix of channels — that way, we avoid duplicating work and the risk of diluting the story’s impact.”

5. Measure what matters

Cutting through the noise to earn media mentions requires keen attention to metrics. Since content marketing and PR metrics overlap, synthesizing the data in your team meetings can save time while streamlining your storytelling efforts.

“For content marketers, using analytical tools such as GA4 can help measure the effectiveness of their content campaigns and landing pages to determine meaningful KPIs such as organic traffic, keyword rankings, lead generation, and conversion rates,” says John Martino, director of digital marketing for Visiting Angels. “PR teams can use media coverage and social interactions to assess user engagement and brand awareness. A unified and omnichannel approach can help both teams demonstrate their value in enhancing brand visibility, engagement, and overall business success.”

To track your shared goals, launch a shared dashboard that helps tell the combined “story of your stories” to internal and executive teams. Among the metrics to monitor:

  • Page views: Obviously, this queen of metrics continues to be important across PR and content marketing. Take your analysis to the next level by evaluating which niche audiences are contributing to these views to further hone your storytelling targets, including media outlets.
  • Earned media mentions: Through a media tracker service or good old Google Alerts, you can tally the echo of your content marketing and PR. Look at your site’s referral traffic report to identify media outlets that send traffic to your blog or other web pages.
  • Organic search queries: Dive into your analytics platform to surface organic search queries that lead to visitors. Build from those questions to develop stories that further resonate with your audience and your targeted media.
  • On-page actions: When visitors show up on your content, what are they doing? What do they click? Where do they go next? Building next-step pathways is your bread and butter in content marketing — and PR can use them as a natural pipeline for media to pick up more stories, angles, and quotes.

But perhaps the biggest metric to track is team satisfaction. Who on the collaborative team had the most fun writing blogs, producing videos, or calling the news stations? Lean into the natural skills and passions of your team members to distribute work properly, maximize the team output, and improve relationships with the media, your audience, and internal teams.

“It’s really trying to understand the problem to solve — the needle to move — and determining a plan that will help them achieve their goal,” Jason says. “If you don’t have those measurable objectives, you’re not going to know whether you made a difference.”

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Don’t fear the merger

Whether you deliberately work together or not, content marketing and public relations are tied together. ImpactLife’s Kirby Winn explains, “As soon as we begin to talk about (ourselves) to a reporter who doesn’t know us, they are certainly going to check out our stories.”

But consciously uniting PR and content marketing will ease the challenges you both face. Working together allows you to save time, eliminate duplicate work, and gain free time to tell more stories and drive them into impactful media placements.

Register to attend Content Marketing World in San Diego. Use the code BLOG100 to save $100. Can’t attend in person this year? Check out the Digital Pass for access to on-demand session recordings from the live event through the end of the year.

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Cover image by Joseph Kalinowski/Content Marketing Institute

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Trends in Content Localization – Moz

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Trends in Content Localization - Moz

Multinational fast food chains are one of the best-known examples of recognizing that product menus may sometimes have to change significantly to serve distinct audiences. The above video is just a short run-through of the same business selling smokehouse burgers, kofta, paneer, and rice bowls in an effort to appeal to people in a variety of places. I can’t personally judge the validity of these representations, but what I can see is that, in such cases, you don’t merely localize your content but the products on which your content is founded.

Sometimes, even the branding of businesses is different around the world; what we call Burger King in America is Hungry Jack’s in Australia, Lays potato chips here are Sabritas in Mexico, and DiGiorno frozen pizza is familiar in the US, but Canada knows it as Delissio.

Tales of product tailoring failures often become famous, likely because some of them may seem humorous from a distance, but cultural sensitivity should always be taken seriously. If a brand you are marketing is on its way to becoming a large global seller, the best insurance against reputation damage and revenue loss as a result of cultural insensitivity is to employ regional and cultural experts whose first-hand and lived experiences can steward the organization in acting with awareness and respect.

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How AI Is Redefining Startup GTM Strategy

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How AI Is Redefining Startup GTM Strategy

AI and startups? It just makes sense.

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