The Customer

Data Platform
Report 2020
Executive Summary
We’re delighted to bring you Segment’s inaugural Customer Data Platform Report. In
this report, you will get a comprehensive overview of how the customer data platform
market is evolving, real life examples of how people are using customer data platforms,
an overview of what’s being tracked (and what’s not), and much more.
For those short on time, here are some quick highlights.

500 billion events

Segment is processing 500 billion events through its customer data platform every
month. And it’s growing. In 2019, the overall volume of events that customers have
tracked through Segment’s CDP increased by 60%.

CDP adoption
CDPs are being adopted by companies big and small. But enterprise companies are
sending data to 20% more destinations than SMB and MM companies.

Top events tracked

The most popular data points being tracked show an increasing focus on behavioral
data. Product added, checkout started, order completed are amongst the most
popular events tracked.

CDP is not just for marketers

CDP is becoming an essential tool for all lines of business, not just marketing. 26% of
customers connect customer success tools, 15% connect CRM, and 31% connect data
warehouses.

Data collection is becoming fractured

The average user of Segment’s customer data platform is sending data to eight
destinations.

CUSTOMER DATA PLATFORM REPORT 2020 2

Table of contents
05 CDP Industry Growth

06 Customer Data Platform Hype

08 What is a CDP (Customer Data Platform)?

09 Customer Data Platforms Use Cases

14 Why Are Customer Data Platforms Popular Now?

18 How Are Customer Data Platforms Being Used [The Data]

33 What We Can Learn About CDPs From The Data

35 Customer Data Platform Predictions for 2020

CUSTOMER DATA PLATFORM REPORT 2020 3

Remember those halcyon days when companies had one piece of software – perhaps a
CRM – to manage their customer data? Well, those days are well and truly behind us.

With the number of tools growing every year (the average SaaS company uses 80+),
businesses are having to invest more and more resources to keep their tools and
customer data in sync.

It’s like a version of Brooks’s Law. If adding more people to a software project only makes
it more complex for your team, then adding more tools to your tech stack only makes it
more complex too.

It’s somewhat unsurprising then that Customer Data Platforms (CDPs) are on the verge
of shifting from a “nice-to-have” technology to a “need-to-have.” Businesses are feeling
the very real effects of fragmented customer data every day. IBM estimates that bad data
costs the US $3 trillion each year. Bad data caused Delta to cancel hundreds of flights
last year and cost the company $150 million.

Customers are becoming equally tired of these fragmented and impersonal experiences.

Check your email inbox right now, and it’s almost a sure bet that you’ll find emails that
call you by the wrong name, asking you to purchase something you literally just bought,
or that clearly was meant for someone else.

To avoid this, businesses are doubling down on software that gives them
a unified customer record, which helps explain the explosive growth in the CDP category
over the past few years.

Just take a look at this research from The CDP Institute. Over a thirty-month period, from
December 2016 to June 2019, the number of CDP vendors increased from 23 to 96.

CUSTOMER DATA PLATFORM REPORT 2020 4

CDP Industry Growth
CDP Industry Growth

6.00
9,206
5.00
96
4.00 6,868 $2,405
77
5,384
3.00 63 $1,725
49 3,999 $1,401
2.00 38 2,918 $1,144
$820
23 1,815 $652
1.00

12- 06- 12- 06- 12- 06- 12- 06- 12- 06- 12- 06- 12- 06- 12- 06- 12- 06-
16 17 17 18 18 19 16 17 17 18 18 19 16 17 17 18 18 19
Vendors Employees Funding ($millions)
Source: The CDP Institute

The CDP Report 2020

Buyer interest is growing equally fast. Data from Exploding Topics, a company that
analyzes how popular search topics are, shows that interest in the customer data
platform category is increasing at a steep rate.

Customer Data Platform

The CDP Report 2020

Data and chart from Exploding Topics

CUSTOMER DATA PLATFORM REPORT 2020 5

Our own data corroborates this.

Over the past year, the overall volume of events that our customers have tracked
through Segment’s CDP has increased by 60%.

The rapid growth of CDP as a category, however, hasn’t been without its growing
pains. In the annual hype cycle, Gartner recently placed CDPs in the peak of “inflated
expectations.” It means that CDP buyers are expecting this technology to do more than
it’s actually capable of.

Customer Data Platform Hype

Hype Cycle for Digital Marketing and Advertising, 2019

Conversational Marketing
Real-Time Marketing
Customer Data Platforms
Customer Journey Analytics
Advanced Supply-Side Bidding
Mobile Wallet Marketing
Consent and Preference Management Location Intelligence for Marketing

Shoppable Media

Visual Search for Marketing Account-Based Marketing Platforms

Event-Triggered Marketing

Over-the-Top TV Advertising
Scannable Marketing
Identity Resolution
Predictive Analytics
Ad Blocking
Mobile Marketing Analytics
Plateau will be reached: Multitouch Attribution
Blockchain for Advertising Native Advertising
Personalization Engines Social Analytics
Multichannel Marketing Hubs
Less than 2 years As of July 2019
2 to 5 years Peak of
Innovation Trough of Slope of Plateau of
5 to 10 years Trigger Disillusionment Enlightenment Productivity
Expectations
Source: Gartner

The CDP Report 2020

This confusion is in part because of how flexible CDPs are. The technology can do a lot –
implementations and use cases vary widely, which makes it hard to define exactly what a
CDP is.

It’s like the story of the blind men and the elephant. Everyone is feeling around for
exactly what it is and drawing their own conclusions.

A marketer thinks a CDP is one thing, a product manager thinks it’s something else, and
an engineer might have a completely different idea.

CUSTOMER DATA PLATFORM REPORT 2020 6

 It’s a DMP!

It’s MDM!
It’s a
It’s a CRM! data
lake!

It’s MAP!
It’s an MSP!
The CDP Report 2020

The inflated expectations of CDPs are also due to the fact that some companies selling
CDPs aren’t honest about the capabilities of their technology.

Research from The CDP Resource shows that over 25% of companies selling CDPs are
not actually selling Customer Data Platforms. Instead, their products are CRMs, DMPs,
and other data technologies passed off as CDPs.

When a company buys one of these “non-CDPs,” they’re understandably let down when
their investment doesn’t do what they thought it would do.

With so much conflicting advice out there, it’s critical for businesses to educate
themselves on what a real CDP really is, how it works, and how they can get the most out
of this technology in 2020.

To help, we’ve put together a comprehensive guide to help you understand the CDP
landscape in 2020.

Our hope is that by understanding why customer data platforms have evolved and how
they are used, you can avoid the trough of disillusionment (as Gartner would call it)
when it’s time to implement a CDP for your company.

CUSTOMER DATA PLATFORM REPORT 2020 7

But before we do that, let’s get our definitions straight. Once we’re all on the same page,
everything that follows will make a lot more sense.

What is a CDP
(Customer Data Platform)?
At its most basic, Fisher-Price level, a Customer Data Platform is a tool that helps you
bring reliable data to every team. That means it helps you with one or ideally all of the
below:

1. Data collection - taking customer data from a number of tools.

2. Data processing and consolidation - combining that data to create unified profiles of
your customers.

3. Data activation and execution - deploy those profiles to other tools to improve your
customer’s experience.

Let’s dig into each of those components.

1. Data collection
A Customer Data Platform enables you to capture complete customer data from
wherever your customers interact with your brand. This includes your “owned” platforms
like your website and mobile apps. It also includes your advertising channels, your email,
CRM, and payment systems. Most importantly, your CDP should enable you to collect
customer data from your servers for greater reliability and accuracy.

2. Data processing and consolidation

Once collected, a CDP will be able to join together all these disparate strands of data
into unified customer profiles. The ability to put individual customers into related
groups gives CDPs a bit of a superpower – you can see all the activity of a user, from any
channel, online or offline, in one place.

CUSTOMER DATA PLATFORM REPORT 2020 8

A good CDP will also be able to create “anonymous” (i.e. prospects who are visiting
your website but you don’t know yet) customer profiles. Once these visitors become
“known” (i.e. they have identified themselves through a website form), you can stitch
them together into a single customer profile. With a CDP, no data point falls between the
cracks.

Finally, a CDP can apply common data standards to make sure the data you’re collecting
is correct and compliant. This means you can diagnose data quality issues and get it
production-ready before you decide to act on it. Which brings us nicely onto our next
point…

3. Data activation and execution

A core competency of a CDP is the ability to easily route data to the tools you use every
day. It’s like the plumbing that ties everything together.

In some cases, a CDP may provide some basic functionality to allow you to execute on
the customer data that it collects. But in most cases, customer data platforms are the
pipes that help your clean, unified customer data flow – from its point of collection into
the tools that you use to drive engagement, loyalty and lifetime value.

Customer Data Platforms Use Cases

The business goal of a CDP is to bring your customer data together in one central
location so that you can improve the decisions you make, your speed in delivery, and
ultimately your customer experience.

But businesses don’t buy software. People do.

And since so many different teams across your company are going to use the CDP in
different ways, here’s a taste of how people are using a CDP day-to-day.

CUSTOMER DATA PLATFORM REPORT 2020 9

Executive teams use CDPs to inform strategy
With a CDP, executives can easily access data to fuel better outcomes, understand
customer journeys, and make data-driven decisions.

For example, when Bonobos, the e-commerce driven apparel company, began to
branch into their first bricks and mortar stores, it became increasingly apparent to Micky
Onvural, their CEO, that they needed to understand all customer touchpoints, both
online and offline.

A customer data platform enables executives like Micky to understand the omnichannel
user experience and how online spend influences offline behavior.

Learn how Bonobos use Segment’s customer data platform

CUSTOMER DATA PLATFORM REPORT 2020 10

Product teams move faster without analytics bottlenecks
Since CDPs break down data silos, product teams can access the data they need to
measure and improve crucial KPIs. They can also quickly scale their growth stacks and
get new processes working in days, not months.

For Imperfect Food’s VP of Product, Patti Chan, who leads a small team of designers and
engineers, the challenge was finding new growth opportunities, while still keeping up
the day-to-day demands of the business. She needed a scalable way to run experiments
and measure results without stretching her team too thin.

Today, they rely on a customer data platform to collect and deliver clean customer data
to quickly run tests and evaluate results.

Learn how Imperfect Foods use Segment’s customer data platform

CUSTOMER DATA PLATFORM REPORT 2020 11

Marketing teams understand the customer journey
CDPs make it easier to connect all of your digital assets – from advertising campaigns
to websites to email marketing. That helps marketing teams build accurate advertising
audiences, better understand attribution, and prove their direct impact.

DigitalOcean wanted to use its data to create highly targeted, personalized advertising
campaigns. But since their data was segmented on so many platforms, building these
complex audiences was too time-consuming. It meant they defaulted to the basic,
generic audiences the advertising platforms built for them, which didn’t convert.

That’s why DigitalOcean introduced a CDP to automate the manual process of creating
advertising audiences. By connecting data from Tray.io, Customer.io, Google Analytics,
Amplitude, and Optimizely, they were able to create highly targeted advertising
audiences and decrease cost per conversion by 33%.

Learn how Digital Ocean use Segment’s customer data platform

CUSTOMER DATA PLATFORM REPORT 2020 12

Engineering teams cut down on time-consuming work
CDPs offer a way to save one of the engineering team’s most precious resources – time.
With a CDP, they can use one API for all customer data collection. They don’t need to
spend weeks building integrations for specific tools.

For example, at IBM, the engineering team struggled with the complexity of their data
feeds. Without one consolidated data pipeline, engineers would spend unnecessary time
patching together disparate different sources, all of varying quality, to get a complete
picture.

With a customer data platform, there’s just one API endpoint for analytics. It doesn’t
matter what tool or what data source is being integrated – they can quickly and clearly
understand the data lineage and trust the information displayed across the business.

Learn how IBM use Segment’s customer data platform

This is by no means an exhaustive list. Amongst the thousands of companies using

Segment’s CDP, we’ve seen everyone from data scientists to sales directors using and
benefiting from a customer data platform.

And while all of the above use CDP in different ways, they are all joined together by a
common interest – understanding and using their customer data more quickly.

CUSTOMER DATA PLATFORM REPORT 2020 13

Why Are Customer Data Platforms
Popular Now?
Venture capital money is pouring into the CDP category (reaching $2.4 billion in the last
half of 2019), and established companies are buying up CDPs at a fast pace.

Just take a look at the high-profile acquisitions in the space over the past 18 months:

• Acquia, the Digital Experience Platform, acquired AgilOne

• Microprocessing company, Arm, acquired Treasure Data
• Dun & Bradstreet, the data company, acquired Lattice Engines
• Radius Intelligence was acquired by Kabbage
• The business planning company, Anaplan, acquired Mintigo
• Informatica, the enterprise cloud manager, acquired Allsight
• Mastercard acquired SessionM

These funding rounds and acquisitions aren’t speculative. They reflect underlying
changes happening in the software industry.

Let’s go deep into examining why CDPs have become a “must-have” technology:

CUSTOMER DATA PLATFORM REPORT 2020 14

1) Data collection is becoming more fractured
A few years ago, we regularly heard predictions that the current technology landscape is
reaching saturation point and that consolidation is inevitable.

Source: ChiefMartec

The CDP Report 2020

In fact, the opposite has happened.

The latest edition of Scott Brinker’s Martech Supergraphic records 7,040 different
marketing technology tools on the market and shows that the landscape is becoming
more fragmented, not less.

Since most, if not all, of the tools in your tech stack are collecting some amount of
customer data, it follows that having a product that brings together all of these scattered
sources of customer data is table stakes.

Rather than seeing CDP as some passing fad, we should instead see CDP as a reflection
of the vast tsunami of SaaS and martech over the past decade.

CUSTOMER DATA PLATFORM REPORT 2020 15

2) Customer relationships are becoming more fractured too
In the not too distant past, managing customer relationships was pretty straightforward.
As our CEO, Peter, recently commented:

“One person, usually a salesperson, owned each and every customer relationship,
and that person manually documented their conversations in their CRM.”

Today, customers are interacting with businesses across more channels than ever
before, making this previously simple relationship much more complicated.

Businesses are expected to track all customer interactions, not just those associated
with sales. Activity on your website and mobile apps, not to mention email, push
notifications, support tickets, are only a fraction of what a business needs to track, store,
and unify.

Now that the internet has fragmented the customer relationship across so many
different channels, we require new tools that help support these complex and circuitous
customer journeys.

3) Data privacy is becoming a priority for companies

With the introduction of the GDPR, the CCPA, and other data privacy laws, protecting
your customer data is crucial. Violations to any data privacy laws can lead to massive
fines, a loss of consumer trust, and a sharp drop in stock value.

Just ask Equifax. After their 2017 data breach, the company lost $4 billion in market
value overnight, were fined $700 million by the FTC, and the company is still trying to
gain back consumer trust.

CUSTOMER DATA PLATFORM REPORT 2020 16

A good CDP will help your company improve data privacy by:

1. Helping you collect first-party data, which is the key to data privacy.
2. Monitoring changes to your data inventory with real-time alerts.
3. Enforcing your company’s data privacy policies with privacy controls.
4. Giving your company a single access point for data.
5. Keeping your data clean and accurate.

Your CDP will help your business take a holistic approach to data security and privacy.

4) From customer acquisition to customer

lifetime value
The growing interest and adoption of customer data platforms is a byproduct of another
macro trend in the industry – the growth in customer acquisition costs.

In the last five years alone, the cost of customer acquisition has increased by over
50%. As a result, businesses have switched their focus from “How do we acquire more
customers?” to “How do you grow lifetime value?”

Forbes recently surveyed a number of marketing executives about their CDP-usage.

53% said their CDPs are helping their teams to understand and engage with their
existing customer’s needs, increasing the likelihood that customers will become repeat
customers.

If your business wants to increase customer retention, drive customer LTV, or

understand which customers are ready to upgrade, you need a CDP.

CUSTOMER DATA PLATFORM REPORT 2020 17

How Are Customer Data Platforms
Being Used [The Data]
Over the past year, we’ve seen an incredible increase in the amount of data flowing
through Segment.

Each month, Segment processes 500 billion events through our platform. In 2019 alone,
the overall volume of events that customers have tracked through Segment’s CDP has
increased by 60%.

Every month, Segment customers

send 500 billion events through
our customer data platform.

The CDP Report 2020

By analyzing the data in aggregate of how customers are using the Segment platform,
we’ve been able to generate a high-level overview of how the CDP market is evolving.

Let’s dive in.

CUSTOMER DATA PLATFORM REPORT 2020 18

Understanding The Data
Before you get started, it’s important to understand how we analyzed and interpreted
the data.

• The data is pulled from a snapshot of data for 1/1/19 to 12/31/19

• In the sources section (1), the graphs show the categories of sources currently in use.

In the events section (2), the graph shows some duplication in events tracked. Login,
login, logged in all appear in the top 20, and are all intended to track similar behavior.
This is due to the vagaries of the businesses we work with and their naming conventions.

• In the destinations section (3), each graph shows the top four tools per category,
according to how many active workspaces that have enabled a destination
in Segment.

Caveats:

• This data is sourced from the internal usage behavior of Segment’s customer data
platform. We have only included tools that have active integrations in the Segment
catalog.

Now that we’ve set some ground rules for interpretation, let’s dive into the data.

1/ Connect - what data sources are customers connecting to

customer data platforms?
The potential of a customer data platform is that it lets you collect and unify all of your
customer touchpoints, not just what’s happening on your mobile apps and websites.

Our data bears this out.

CUSTOMER DATA PLATFORM REPORT 2020 19

 The most popular sources connected to a customer data platform

The CDP Report 2020

If we examine the data sources connected to Segment’s customer data platform, we see
five main types of sources: Web (Analytics.js), Mobile (iOS, Android), Server (HTTP API,
Node.js, etc.), and Cloud (Stripe, Intercom, etc.).

This is a reflection of customers wanting to understand the entire customer journey.

In times gone by, most companies would simply analyze what was happening on their
websites and mobile apps.

But that’s just a fraction of the customer experience.

Customers today aren’t just using clicking around your website or app. They’re chatting
to support via live chat, talking with your sales team via email, clicking on ads on
Facebook, and much more.

The data above shows us that customers are bringing a wide variety of data into
customer data platforms to give them a complete picture of all customer interactions
with a business.

CUSTOMER DATA PLATFORM REPORT 2020 20

 2/ Governance - what events are being tracked by customer data
platforms?
Bearing in mind the fragmentation we discussed earlier, the list of events tracked by

Thecustomer data platforms is long and varied.

most popular events being tracked by a customer data platform

1 name,count 27 Experiment Viewed,577 53 Sign Up,319 79 enrichment_provider,232

2 Application Opened,4372 28 Checkout Step Completed,575 54 Logged Out,315 80 Coupon Applied,230
3 Application Installed,3414 29 Checkout Step Viewed,569 55 Welcome,315 81 Design,229
4 null,3280 30 Signed In,568 56 Email Sent,313 82 Amount,229
5 Application Updated,2547 31 Install Attributed,541 57 Video Playback Resumed,306 83 Payment,223
6 Order Completed,1952 32 Product Clicked,524 58 Payment Info Entered,303 84 About,222
7 Login,1869 33 Email Bounced,508 59 Viewed Product,299 85 UI,220
8 Home,1477 34 Checkout,495 60 Push Notification Tapped,290 86 Landing,218
9 Product Added,1346 35 Account Created,478 61 settings,284 87 Page Viewed,217
10 Product Viewed,1224 36 Viewed Post,470 62 Confirmation,282 88 Delivery,217
11 Checkout Started,1108 37 Dashboard,467 63 Video Content Playing,278 89 Viewed VDP,216
12 Application Backgrounded,1106 38 Unsubscribed,452 64 Signed Out,269 90 click,216
13 Email Opened,1006 39 home,447 65 visit,267 91 logout,215
14 /,888 40 Logout,418 66 Video Content Started,262 92 Video Ad Completed,215
15 login,887 41 Video Playback Started,416 67 Register,260 93 Logged in,210
16 Logged In,875 42 /login,416 68 signup,259 94 Forgot Password,207
17 Email Delivered,860 43 Signup,402 69 User Logged In,258 95 Video Ad Started,206
18 Viewed Home Page,837 44 Completed Order,380 70 Video Playback Buffer Started,253 96 Step Interacted (Appcues),203
19 Product List Viewed,792 45 Cart,353 71 251
Video Playback Buffer Completed, 97 Onboarding,202
20 Email Link Clicked,758 46 Error,351 72 Message,243 98 Reset Password,201
21 Search,756 47 Sign In,345 73 dashboard,240 99 Button Clicked,201
22 Settings,732 48 Video Playback Paused,333 74 Flow Started (Appcues),237
23 Signed Up,728 49 Video Playback Completed,330 75 Step Started (Appcues),237
24 Product Removed,706 50 Products Searched,330 76 Recipient,236
25 Cart Viewed,613 51 search,324 77 Log In,233
26 Profile,593 52 Account,323 78 Video Content Completed,233

The CDP
Perhaps unsurprisingly, the top events tracked are the core customer lifecycle Report 2020
events.
For a B2B product, that’s things like signed up, logged in, and account updated.

For a B2C product, that’s things like product added, checkout started, order completed,
etc.

However, businesses are getting way more granular than that – tracking everything from
push notification tapped to password reset.

Does this mean that to adopt a CDP, you need to track every single one of these events?
Absolutely not. It’s a mistake to think that tracking more metrics will help you understand
your customers better. More often than not, you end up rich in data but poor in insight.

Some of Segment’s most successful customers limit themselves to tracking a handful of

important events that help them answer equally important business questions.

CUSTOMER DATA PLATFORM REPORT 2020 21

3/ Taking action - what destinations are customer data platforms
sending data to?
Simply having a unified customer database isn’t enough; you need to be able to use that
database effectively. A CDP is most useful when it’s used as your central nervous system
and pipes clean, accurate, and consolidated data to where you need it most.

We’ve found our customers connect anywhere from three to twenty-three data
destinations to their CDPs.

[Editor’s Note: What’s a data destination, you ask? It’s simply the application to which
you’re sending data. An email marketing platform, for example, could be a data
destination.]

Across all customers who are actively sending data, we see the following:

% of workspaces with 15 or less destinations as plotted

100%

50%
have < 3
75% destinations

50%
90%
have < 8
destinations
25%

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Number of Destinations

The CDP Report 2020

Unsurprisingly, the number of tools businesses are connecting to their CDPs has much
to do with the specifics of their business. Enterprise customers are likely to connect
more tools than, say, a small emerging startup.

CUSTOMER DATA PLATFORM REPORT 2020 22

 Enterprise companies are sending data to 20% more destinations

SMB
1. Average: 3
2. 90th percentile: 10
3. 95th percentile: 12
4. 99th percentile: 17

MM
Destinations enabled 1.
2.
Average: 3
90th percentile: 9
- by company size 3.
4.
95th percentile: 12
99th percentile: 18

ENT
1. Average: 3
2. 90th percentile: 12
3. 95th percentile: 16
4. 99th percentile: 23

The CDP Report 2020

This data is interesting at an aggregate level (we’ll explain why a little later), but,
naturally, you might also wonder what kind of destinations people are sending data to.

We’re glad you asked.

Below, we can see the most common categories of tools that businesses are sending
data to.

Tool category % of connections Tool category % of connections

Analytics 83.6% Personalization 9.3%
Email Marketing 41.5% Attribution 5.6%
Advertising 31.6% A/B Testing 5.4%
Warehouses 31.0% Surveys 5.1%
Customer Success 26.2% Feature Flagging 3.7%
Livechat 23.3% Enrichment 3.2%
Heatmaps & Recordings 21.5% Deep Linking 2.6%
Raw Data 17.8% Marketing Automation 2.0%
CRM 15.3% Video 0.9%
Tag Managers 14.4% Email 0.7%
12.3% Referrals 0.4%
Performance Monitoring 9.3% Security & Fraud 0.4%

The CDP Report 2020

CUSTOMER DATA PLATFORM REPORT 2020 23

Since each category solves a different problem or appeals to different functions within
a business, this data helps us understand what teams or business units are seeing the
most value of a CDP.

If we drill down even further into some of the categories, we can see in granular detail
the most popular tools where people are activating their customer data. In doing so,
we’ve been able to generate an in-depth view of how the SaaS market is evolving for
analytics, marketing, and growth.

A/B testing

A/B testing tools by usage

The CDP Report 2020

In the mid-2000 and early 2010s, having a quantitative understanding of how your
marketing efforts was a relatively novel concept.

Optimizely was one of the first companies to seize on this gap in the market and, since
then, have continued to own the lion’s share of the market.

However, if we examine A/B testing as a percentage of the overall categories of tools

businesses are sending data to (see the preceding graph), only 5% of Segment’s
customers are sending data to A/B testing tools.

CUSTOMER DATA PLATFORM REPORT 2020 24

Analytics

Analytics tools by usage

The CDP Report 2020

In the analytics category, Google Analytics is the most popular data destination by a
wide margin. That’s not surprising, considering almost 85% of the top 100,000 websites
in the US use Google Analytics.

What is surprising is that 2019 was a year of huge growth for GA amongst users of
Segment’s CDP. Just look at that spike! This growth can partially be explained by a year
of significant customer growth in the Segment Startup program. It makes sense that a
free tool like Google Analytics is popular with bootstrapped startups.

CUSTOMER DATA PLATFORM REPORT 2020 25

Advertising

Advertising tools by usage

The CDP Report 2020

In the advertising category, the Facebook Pixel is the most enabled data destination with
Google Ads coming in second. All other advertising tools are holding relatively steady,
with a smaller percentage of our users connecting them.

This tallies with broader industry data that shows Facebook ads as being a particularly
efficient channel for paid advertising, with the lowest
median CPC.

CUSTOMER DATA PLATFORM REPORT 2020 26

Attribution

Attribution tools by usage

The CDP Report 2020

Given the power of CDP in giving users a complete view of your campaign performance,
it should come as no surprise that attribution is a popular destination to send data to.
AppsFlyer and Branch Metrics are the two most popular attribution tools used by our
CDP customers, but Adjust has also seen a lot of usage with Segment’s customers.

CUSTOMER DATA PLATFORM REPORT 2020 27

CRM

CRM tools by usage

The CDP Report 2020

Examining which CRM tools that data is sent to provided some interesting insights.
Salesforce, the longtime industry leader, is a less popular destination amongst
Segment’s customers than turnkey CRMs, like HubSpot and Intercom.

CUSTOMER DATA PLATFORM REPORT 2020 28

Customer success

Customer success tools by usage

The CDP Report 2020

Customer success platforms were among the earliest classes of systems identified
as CDPs.

So it was surprising that last year, we observed that the number of Segment customers
connecting customer success tools to a CDP was flatlining. Furthermore, the customer
success category was without a clear winner who was dominating the market.

This year, the opposite is true, with Zendesk becoming by far the most popular tool in
the category. Gainsight, Help Scout, and ClientSuccess come in a distant 2nd, 3rd, and
4th, respectively-.

CUSTOMER DATA PLATFORM REPORT 2020 29

Email

Email tools by usage

The CDP Report 2020

As we saw earlier, one of the most popular use cases for a CDP is to make data available
in real-time, so that companies can deliver personalized experiences. It follows 40% of
Segment’s customers are sending data to an email marketing tool.

In January, MailChimp exceeded a 60% share of the email marketing industry. Our data
tells a similar story, with MailChimp being the most popular email marketing destination
to send data to.

CUSTOMER DATA PLATFORM REPORT 2020 30

Live chat

Live chat tools by usage

The CDP Report 2020

Once synonymous with archaic customer support, live chat has become one of the
fastest-growing categories of software. Love it or hate it, it’s now the de-facto way of
talking directly with your users on your website.

Intercom, having pioneered the concept of live chat messaging back in 2011, is the most
popular live chat destination for Segment users. Still, Drift, who we identified last year
as one of the fastest tools in this category, have proven that new entrants can still take
market share.

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SMS and Push Notifications

SMS and Push notification tools by usage

The CDP Report 2020

Over the past few years, we’ve seen a significant increase in the number of customers
choosing to pair our customer data platform with SMS and push notification technology.
In 2019, two tools in particular had a breakout year – Braze and Iterable.

In a world where irrelevant and impersonal marketing is still the status quo, having a
CDP that can connect all of the engagement and additional data collected and streamed
by tools like Braze and Iterable in near real-time opens up a new world of customer
engagement.

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What We Can Learn About CDPs
From The Data
Zooming in on the usage data can help give us the raw and unprocessed facts about
how people are using a customer data platform day-to-day.

But it’s also worth zooming out to look for patterns and causes that may illustrate wider
trends affecting the CDP market. Here are some big picture trends we noticed.

Both big and small companies are adopting CDPs

With the average number of tools being used by a SaaS company at 80+, conventional
wisdom would dictate that the ideal candidate for a CDP was an organization that had a
complex, multi-tool technology stack.

While organizations with a multi-faceted tech stack will undoubtedly benefit from a
CDP, it was encouraging to see companies finding value with a CDP with as few as three
destinations.

As a rule of thumb, the bigger the company -> the bigger the tech stack -> the more
destinations they’ll have to route data to.

But even for a growing company with a relatively modest tech stack, they can benefit
from the core CDP features of data processing, segmentation, and identity resolution.

CDP usage is increasing across the entire organization

CDP is often pigeonholed as a technology exclusively for the marketing department.

However, if we look at the most common destinations that businesses are sending data
to, the value of a CDP is going far beyond the walls of the marketing department.

Amongst those using Segment’s customer data platform, 26% connect customer
success tools, 15% connect CRM, and 31% connect data warehouses.

As the CDP market matures and hits the mass market, we’ll likely see the user base
expand towards more and more functions throughout the business.

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CDPs are seeing an increasing focus on behavioral data
There was a time when businesses were happy to collect simple vanity metrics like new
signups, downloads, or pageviews. But page views of your homepage are irrelevant
when what you actually need are paying, engaged users. Nowadays, the appetite to
understand the entire customer journey extends way beyond that.

Amongst the events tracked by users of Segment’s CDP, there is an increasing focus on
behavioral data. Behavior-based events like User Logged In or Application Opened
are tracked commonly (though with different naming conventions) and are much more
indicative of a healthy business long term.

That being said, there’s still work to do for businesses who want to understand the full
funnel. For example, we see a lot fewer customers tracking Checkout Started than
Order Completed in our customer data platform.

Customers are tracking both positive and negative events

While it’s easy to use a CDP to tracking positive events like signups or goal completions,
it was interesting to see customers use Segment to identify negative events too, such as
Error, Unsubscribed, etc.

This can partly be explained by the dynamics of SaaS, and heightened customer
expectations in general. If a SaaS product doesn’t deliver recurring value, the customer
walks away. It’s on the vendor to track as many signals as possible, both positive and
negative, to ensure the success of the application.

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CDP Predictions for 2020
The above data tells a compelling story about the growth of the customer data platform
category over the past 12 months. But to truly understand customer data platforms, we
must, like Janus, look forward as well as backward.

To do that, we talked to three individuals who are particularly passionate about the
category and who are best placed to predict what might be around the corner.

Prediction #1: 2020 Will Be The Year CDP Enters The Mainstream
With the dramatic increase in RFPs and customer adoption of CDPs over 2019, David
Raab, the founder of the Customer Data Platform Institute, has predicted that customer
data platforms will be a clear line item in technology budgets.

“2020 will be a pivotal year for the CDP industry as independent vendors face
new competition from large enterprise software companies. We can expect even
more confusion over the definition of CDP as new players promote their own vision
for the category. With luck, a clearer understanding will emerge of the different
functionalities that companies need to manage and use their customer data, and
less debate over which particular combination should constitute a CDP.”
David Raab, Founder, CDP Institute

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Prediction #2: Customer Data Platforms Will Have to Balance
Privacy and Personalization
Many of those we interviewed for this article highlighted privacy as an area of particular
focus for the year ahead. Specifically, they called out the privacy-personalization
paradox – how to balance the desire for data-driven personalization with their
customers’ desire for better data privacy.

At first glance, it might appear that CDP – designed to track customer data – could
actually contribute to data privacy problems. In reality, it’s quickly becoming an
indispensable part of the solution.

It’s on vendors to educate the market accordingly.

“Education is currently a big hurdle for CDPs. CDPs have gained a lot of traction, but
there are still plenty of misconceptions about their potential.”

One of the most important benefits of a CDP is being able to keep up with the growing
demands of the end consumer by providing them with personalized experiences. But
at the same time, the privacy concerns of these are becoming equally critical. I feel
like this could slow down the adoption of CDPs.”
Rahul Jain, Director of Product, VWO

B2B Marketers Plan More CDP Deployments

54% B2C B2B

34% 35%
30%
27%
19%

Deployment under Plan to deploy No immediate

way or complete within 12 months plans to deploy

CDP Deployment Status

Source: The CDP Institute, 2019

The CDP Report 2020

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Prediction #3: Customer data platforms will move from adoption
to automation
If 2019 saw consolidation around the core competencies of a customer data platform,
2020 will likely see new ones added. One area we expect to see innovation are purpose-
built workflows created on top of CDPs.

On top of the integrations that just share data both ways, it’s possible that CDPs could
add additional API endpoints to perform these actions themselves. In moving from
intelligence to action, CDP would move further up the value chain.

“Considering the efficiency with which CDPs aggregate and unify customer identity
and behavioral data, the next big thing will be automated workflows set up directly
within the platform for specific use cases.

That could be marketing purposes e.g. send a specific email based on the customers
latest action, such as clicking on an ad or starting to use a competitor tool (tools
involved could be Segment, Reply, Outreach, Datanyze). It could be for sales e.g.
allocate deals to tier-based AE teams based on incorporated data qualifying the
potential value of a deal (tools involved could be Segment, HubSpot, Salesforce). Or
it could be for success e.g. prompts to ensure successful onboarding indicators of a
successful onboarding (tools involved: Segment, Vitally, HubSpot, Salesforce).

Incorporating machine learning models to predict key behaviors (intent to buy, intent
to upgrade/downgrade) or to enrich customer data both at the user and the account
levels (probability of closing a given subscription plan) will enable CDP users to dive
deeper, and ultimately deliver on what they’ve advertised.”
Axelle Heems, Growth Ops Manager, Gorgias

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We’re incredibly excited to see what lies ahead for the customer data platform category.
With Salesforce, Adobe, and others entering the market with their own take on a CDP,
over the next twelve months, we can expect to see more funding and more acquisitions
as customer data platforms become a regular line item in annual martech budgets.

This is a big win for the vendors involved, but an even bigger win for the customer.

The growth and evolution of the customer data platform is an acknowledgment that data
quality, governance, privacy, and integration are key to the customer experience today,
something Segment has been championing for the past eight years.

We can’t wait to see what’s next.

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