Thursday, February 07, 2019

European CDP Market Is Still Behind the U.S.

I returned earlier this week from a sequence of workshops, speeches, and meetings in Europe, all focused on Customer Data Platforms. Here are some observations:

- The European CDP market is indeed behind the U.S. My own conversations are with people who already care about CDPs, so they're a very skewed sample.  But vendors, consultants, agencies, and marketers I spoke with mostly agreed that the larger community is just beginning to hear about the concept. Many are seeking to position themselves as early adopters or experts, sensing a big business opportunity.

- Separate martech staff is rare. Nearly every large and mid-size company that I see in the U.S today has someone in charge of marketing technology, and often an entire team of marketing technologists reporting to the CMO. I was told this is much less common in Europe and personally didn’t meet anyone with a martech title. Nor did I hear about powerful IT departments taking charge. Rather, it seems that marketers still mostly act on their own, which is how it worked in the U.S. until a few years ago. I did have the impression that European marketers rely more heavily on specialist consultants to help them out, but that might be biased by the fact that many of my meetings were with consultants.

- DMP means something different in Europe. We consistently heard that marketers throughout Europe, and especially in France, were oversold several years ago on Data Management Platforms as a complete solution to handle all customer data needs. This contrasts quite sharply with the U.S., where DMPs have in most cases been understood as limited to serving up digital ad audiences. European DMPs are now recognized as having failed to deliver on the broader promise, which is beyond their technical capabilities. The resulting backlash greatly damaged the image of DMP products and has left marketers looking for a new solution that is truly capable of meeting their needs. Many recognize that CDP could be this solution and are intrigued.  But they're also skeptical and worried that they’ll be fooled again. This makes it harder for CDP vendors to sell their products. On the bright side, it also means the problem CDPs address is already well understood.

- CRM also means something different.  Back when Bill Clinton was president, CRM was described as a trinity of sales, service, and marketing systems, with marketing much weaker than the other two.  It commonly referred to B2C as well as B2B. Later, in the U.S., the term came to be more associated with B2B sales and customer service in general and the Sales cloud in particular. In Europe, CRM is used very broadly to mean any and all customer data, extending far beyond sales, service, and marketing, and including both B2B and B2C.  On reflection, I may have recently been hearing people in the U.S. apply the term more broadly as well.

- Use cases are everything. We’ve seen a huge demand to present CDP use cases in the U.S.  But it seemed even more pressing in Europe, perhaps because understanding of the CDP concept is weaker. One difference seemed to be that Europeans are willing to interact with vendors as a way of learning: while many U.S. buyers actively avoid vendors during the early stages of the purchase process, we heard quite a few requests in Europe to see detailed demonstrations of how individual vendors accomplish specific tasks. Maybe the European salespeople do a better job of being consultative, or maybe European buyers are less determined to find things out on their own. Or maybe it’s just my imagination.

- Immediate ROI is required. We also found a greater focus in Europe on use cases that tie directly to marketing programs, as opposed to the analytical use cases that are most common starting CDP applications in the U.S. The reason seems to be that European buyers are more insistent on finding a specific financial justification for their investment. Many U.S. buyers will accept a broader strategic justification and start with analytical use cases. This may be why European CDP vendors are more likely to offer a full scope of data, analytical, and campaign capabilities, since buying them in a single package makes it easier to tie new marketing programs directly to the CDP investment.

- National markets are distinct. Some of the big U.S. vendors are present throughout Europe, but many local vendors are largely limited to individual markets. We had some sense of this beforehand but the isolation was greater than expected. The French market in particular has its own ecosystem of CDPs and other types of software that have a major domestic position but little presence elsewhere. The Netherlands, German, Nordic and UK markets show more cross-over, probably because English is widely spoken in all of them. The greater interest in CDP-based marketing programs may also encourage this, since marketing programs are closely tied to specific local markets.

- GDPR hasn’t caused much change. We had some discussions about using CDP for GDPR compliance but privacy constraints in general rarely come up. The common attitude was that privacy rules were already tight in the countries we visited (Belgium, Netherlands, Germany and France), so GDPR hadn’t required significant adjustments. There was also some discussion about waiting to see how the rules are actually enforced, which might require further adjustments if the regulators are strict.


While these differences are interesting, they’re also fairly minor. Over all, the European marketers were feeling the same pressures as their U.S. counterparts to create unified data for better customer experiences. So while each market will have its own quirks and proceed at a its own pace, it looks like they’ll follow the same general path as the U.S.

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