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February, 2024

Salesforce, Tealium, Adobe, Treasure Data dominate Gartner’s first Magic Quadrant for Customer Data Platforms but Sitecore nowhere; Market may have already peaked – prepare for consolidation

What you need to know:

  • The key business cases driving customer Data Platform uptake in Australia include digital identity, media effectiveness and efficiency, personalisation, and regulatory compliance.
  • With more than 20 CDP vendors active locally, buyers now has an important new tool – research firm Gartner has released its first ever Magic Quadrant for Customer Data Platforms.
  • Salesforce scores the gold with the highest ranking, and Adobe and Tealium join it in the Leader Quadrant. So does Treasure Data, though the firm is not as active in Australia.
  • Twilio (Segment), Amperity and Oracle get call outs as visionaries.
  • But Sitecore is missing in action.
  • Strong partner networks are a common quality across all the leaders.
  • Deal size is up significantly over five years – over 80 per cent higher, but we may have reached the high water mark. Researchers reckon after a period of saturation there is now emerging evidence indicating that the CDP space is a maturing market.
  • Get ready for consolidation.

We have two use cases. One is for our audience side. And that's everything from paid media down through retention to churn, reduction, engagement, and retention. And then on the other side of the business our ad sales team, and we're using that for targeted segments for audio, ad serving as well.

Cam Strachan, Head of Data and Analytics, SCA

We couldn’t do any first party insights, segmentation or targeting without the CDP,” says Pippa Leary, managing director, client product, News Corp. “It is a game changer for us.”

On that point, she is not alone. Marketers who have successfully navigated the often difficult and complex world of customer data platforms and for whom the costs stack up, say they are realising significant gains.

Take Accent Group for instance. With a need to orchestrate data across a fleet of 800 stores and a roster of more than 34 brands, including The Athlete’s Foot, Platypus Shoes, Hype DC, Skechers, Hoka & Dr Martens, it is typical of the kind of Australian organisation that has turned to Customer Data Platform to manage its needs. That includes unifying, managing and activating its customers across multiple online and offline touchpoints with the ultimate goal being to offer personalisation at scale – martech’s Holy Grail. 

Accent chose one of the newer comers in the CDP market – Amperity – and it looks like it chose wisely with its provider landing a spot in the ‘Visionary’ corner of the first ever CDP Magic Quadrant from Gartner.

“We strive to provide exceptional customer experiences across all of our brands, which requires a CDP that delivers on the promise of unifying all online and offline customer data and making it actionable,” said Deena Colman, Group General Manager Digital & Marketing at Accent Group, at the time the deal was announced late last year. 

Ultimately Accent’s goal is to unify and activate all of its customer data and deliver a seamless, personalised omnichannel journey.

For Carsales GM Media, product and technology, Stephen Kyefulumya, an Adobe CDP has been central to its mission to future proof the business in the context of shifting privacy regulations, and in rebuilding visibility over firstly the Safari and now Chrome audiences in a world of deprecating cookies (eventually).

“The CDP sits as the central piece that orchestrates all your signals coming in, lands them and curves those signals into attributes. So signals turn in attributes and those attributes turn into segments that help with personalisation,” he said.

Cam Strachan Head of Data and Analytics at Southern Cross Austereo (SCA) meanwhile is six months further along on the CDP journey than when we last spoke. But like Colman and Kyefulumya, he can now lay claim to having a fine eye for CDP horseflesh, given that SCA selected Salesforce, which came in as the leader in the Magic Quadrant.

“We have two use cases. One is for our audience side – and that’s everything from paid media down through retention to churn, reduction, engagement, and retention,” he told Mi3. “And then on the other side of the business our ad sales team, and we’re using that for targeted segments for audio, ad serving as well.”

“We are using it for paid media, so we push our own audience segments through to the Trade Desk, Meta and Google Ads. Our media agency uses that for suppression. Plus we do targeted segments, based on what we call pillar campaigns, for things like sport. 

SCA also now uses the CDP for outbound email and outbound push messaging, and its integrated with Salesforce Marketing Cloud for email and push messaging.

The decision to go with Salesforce’s CDP was made before Strachan joined although he is across the business case, which is pretty much stock in trade. “Essentially, we were looking for a single customer view to link our brands together.” 

Consideration was also given to Adobe, Tealium and mParticle, but ultimately the lure of the integrated Salesforce stack won out.

Leaders, and one unexpected laggard

Salesforce scored top billing in the first Gartner Magic Quadrant, which this week landed in the inboxes of the consulting firm’s clients and is due to be made more readily accessible to the wider market in the next few days. The software giant has only a handful of CDP clients in Australia including Bunnings, Mecca and Southern Cross Austereo. Despite that, Gartner says it leads on both ability to execute and the completeness of its vision.

Tealium, which per Mi3 research takes the lion’s share of corporate CDP revenues in Australia, and whose clients include a who’s who of leading banks, retailers and media businesses (the likes of NAB, Woolworths and Domain) is also highly placed in the Leaders quadrant. 

Adobe, with Tourism Australia, Carsales, Coles and Hesta in its camp, makes up the third of the tier one CDPs active in Australia in the top box.

A fourth CDP provider – Treasure Data – is also rated a leader. However, it is comparatively inactive in Australia with no apparent local office, and in this region it operates out of Japan. A spokesperson confirmed that it does have local customers, although they declined to name them.

Twilio’s Segment which Mi3 identified as having the largest installed base in Australia including Foxtel, Seek, and Safety Culture is identified as a ‘visionary’, along with Amperity (Endeavour Group, Accent, and Servco) and Oracle (University of Tasmania).

The biggest surprise in the report however is who is missing – Sitecore. The martech company with local implementations at Jetstar and Destination Gold Coast, and whose CDP was rebadged from Boxever to Sitecore Customer Data Platform, does not feature at all in the report. Company insiders were not happy – stunned – according to those contacted by Mi3.

Even SAP, largely absent from the CDP conversation in Australia, and mParticle with local customers including Cashrewards, Nova and KFC at least get a spot on the ‘niche provider’ quadrant.

Driving demand

A single customer view is central to many of the business cases which Jakub Otrząsek, VP of Data, APAC for Media Monks and his team becomes engaged with. The firm typically gets brought in to provide advisory over choice of provider, to do implementation, or to help with value realisation, per Otrząsek. In the context of the new Magic Quadrant, Media Monks has experience across all three of the Australian-active leaders, as well as with other CDPs such as High Touch, mParticle, Amplitude and Optimizely.

Across both large and mid-sized brands, Otrząsek said many of the use cases the firm sees are based on value realisation from their first party data strategies. “The bigger brands talk about things like suppression in the context of third party cookie deprecation. Almost every CDP engagement is built around the single customer view … It’s all about a higher level of marketing automation and efficiency.”

According to Otrząsek: “Basically what marketers want is a user interface where they can log in, choose certain types of parameters, create an audience, and then shoot out that audience to some form of media – an EDM, paid search, or display, for instance.” Taking that approach is enabling “monumental gains” for some CMOs.

As to which vendors are getting the most love from the customers, Otrząsek said that depends on the use case.

As marketers’ interest in these investment wanes, responsibility for tech investment is swinging back toward IT.

Gartner Magic Quadrant for Customer Data Platforms

Leadership set

Salesforce gets the highest rating in the report. Gartner’s a fan, albeit qualified: “Salesforce is a Leader in this Magic Quadrant. Its Salesforce Data Cloud, a hyperscale data platform built on Hyperforce and integrated into the Salesforce platform, activates data across (and beyond) the Salesforce ecosystem.”

Connectivity to its other cloud offerings such as Sales, Service, and Marketing Cloud is identified as a key strength, as its commitment to ecosystem innovation and what Gartner describes as a strong partner network.

However connectivity is a two-edged sword, and Gartner cautions that “buyers with few or no Salesforce tools or with use cases requiring access to other applications may need a paid solution from its AppExchange or MuleSoft iPaaS.”

Tealium which scored a clear second to Salesforce – and almost matched it on ability to execute – wins praise for its complex data and regulatory systems, and for its partner ecosystem. Crucially, unlike Salesforce and Adobe, it can take a position of market neutrality. “Tealium’s heritage in tag management (Tealium iQ) and its more than 1,300 OOTB connectors make integrations a core differentiator and success factor in maintaining vendor neutrality,” per the report. “This neutrality across the martech and adtech ecosystems makes the solution a good option for marketers pursuing a best-of-breed martech stack.”

It gets marked down however for what Gartner calls “confusing modularity” which the analysts say “creates a complex buying scenario and can cause customer confusion around which modules are critical for success”.

Tealium’s B2B capabilities are also criticised as rudimentary, and it also lags on the customer experience front.

Meanwhile Adobe’s strengths are seen as its full funnel vision, a cohesive interface that makes it easy to navigate from the CDP to other Adobe platforms and – as with Salesforce and Tealium – a strong partner network.

Treasure Data, which is not as active in Australia, actually outperforms Adobe in the report. Its strengths were identified as its ability to track open web advertising and its vision for connected customer experiences via its cross-CRM customer profile. However, its a talent hog, creating a high reliance on technical users, and its real-time capabilities fall short. It also has poor customer retention, per Gartner, though the firm says that may be partly due to a deliberate decision to focus on high-end clients.

Sustained or waning?

According to the report, customers want to understand how CDPs factor into a marketing technology roadmap and their enterprise customer data management architectures.

Deal size is up significantly compared to five years ago, but Gartner says the lure of CDPs – after Australia’s apparent “bender” just 12 months ago – may finally be peaking.

“After a period of saturation, early evidence indicates that CDPs are a maturing market. In 2023, respondents reported deploying an average of 2.2 CDPs, down from 2.9 reported in 2022. As marketers’ interest in these investment wanes, responsibility for tech investment is swinging back toward IT.”

Gartner’s view is not universal, however. Rival Forrester still regards CDPs as an emerging market, especially in APAC.

According to Forrester Principal Analyst, Xiaofeng Wang, “Most vendors are still in the early stages of developing their business in APAC, indicating that the market is still emerging compared to more established markets such as in North America. CDPs have made significant progress in APAC since we published previous vendor research and The State Of Customer Data Platforms In Asia Pacific report.”

Wang has identified 22 vendors with $5 million or more annual customer data platform (CDP) revenue from the APAC market.

“Despite lower adoption and investment from marketers than cross-channel marketing hubs (CCMHes), the CDP market in APAC is experiencing significant growth,” she wrote in a blog post. “Average revenue for CDP vendors in APAC has doubled in the past two years, although none have reached Forrester’s $100 million revenue threshold for medium vendors.”

Clarification: This original version of this article referred to Destination Queensland. The correct name of the organisation is Destination Gold Coast.