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How Customer Data Platforms Are Banking on the GDPR

One marketing tech sector is capitalizing on data regulation

One company’s Armageddon is another company’s sales pitch.

Customer data platforms (CDPs) are having a moment. According to MarTech Today’s industry landscape, there were 25 CDPs in 2017, up from 12 in 2016. The demand for CDPs is being bolstered by the European Union’s General Data Protection Regulation (GDPR), which becomes enforceable in May and stipulates that people’s data can only be used if they give a company explicit permission.

There is a fair amount of overlap between CDPs, data management platforms (DMPs) and customer relationship management platforms (CRMs), which are all used to store people’s data. CDPs' main point of differentiation is that they deal exclusively with first-party data, whereas the other types of platforms tend to specialize in third-party data. While many marketing tech companies are likely going to get slapped by the GDPR, CDPs' pitch is that they are less likely to be at risk of getting fined because of their first-party focus.

Meanwhile, other vendors—like retargeters, location data companies, demand-side platforms (DSPs) and DMPs—are caught in the GDPR crosshairs because they often rely on third-party data. This makes it difficult for them to get users’ consent, since vendors of third-party data don’t have a direct relationship with the end-user whose information they are profiting from.

“For us, [GDPR] is more of an opportunity than a threat,” said Martijn van Berkum, CTO of CDP BlueConic.

Roughly 60% of BlueConic's prospective customers in Europe are led to it by their GDPR curiosity, van Berkum said. The company expects that percentage to rise as the deadline nears.

The GDPR is driving marketers to first-party data handlers at a time when anxiety is high over the new regulation. In a spring 2017 survey from Veritas, 32% of business decision-makers worldwide were concerned that they didn’t have the right tools in place to monitor data as they prepared for the GDPR.

Marketers are also flummoxed by the regulation. In a December 2017 survey by Warc, 24% of brand marketers said that consumer data regulations like the GDPR will be one of the industry’s biggest concerns this year.