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A Buyer’s Guide to
Composable CDPs

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INTRODUCTION
Of all the topics in the martech space today, the topic of Composable CDPs is perhaps the most
confusing. Providers and analysts offer wildly varied points of view on their viability, utility, and
place in the ecosystem. Such disparate viewpoints add to the prevailing confusion surrounding the
composable CDP trend, leaving buyers to navigate undisclosed complexities and nuances vendors
may not divulge entirely, making it difficult to separate hype for reality, and fact from fiction.

In this Buyer’s Primer to Composable CDPs, Actable will offer four core insights about the
composable CDP opportunity, paired with practical guidance to inform the composable CDP buyer.

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INSIGHT #1
The Architecture is Composable, Not the CDP
A tool itself is not composable. Architectures are composable. Tools that support interoperability
and MACH principles are good citizens within a composable architecture, where data and
applications are independent of each other, but interoperable.

As organizational cloud capabilities have matured, brands are now creating their Single Customer
View (SCV) within cloud native applications and services that solve for identity, data modeling, and
data quality. They no longer need a “packaged” CDP – which recreates customer data within the
CDP environment - to solve for SCV. Some CDPs – old and new- are accommodating this trend. As
brands shift their approach to managing customer data in the cloud, these CDPS are enabling a
modular approach to integrating into the martech stack, layering their core application
functionality on top of a brands existing cloud data store. This approach is what most now call a
‘Composable CDP.’

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KEY TO BUYER SUCCESS:

Evaluable the Right Capability
Once the SCV moves to a cloud database that function is no longer performed by the CDP-
identity resolution, data integration, and data storage capabilities all now occur in the cloud
database. What remains of the “CDP” operates primarily as an orchestration platform. Its key
capabilities include managing audiences, managing journeys, developing predictions with
machine learning, and activating the customer data.

Simply stated, they help you make decisions and deliver experiences based on those decisions.
When evaluating CDPs in a composable architecture, buyers should put these functions first and
foremost and vet vendors carefully according to their own enterprise’s orchestration and
personalization requirements.

INSIGHT #2
C360 is a Myth
Within a composable architecture, orchestration providers—labeling their platforms as Data
Activation, Reverse ETL, or Composable CDPs—assert the necessity of a Customer360 housed
in a cloud database. The industry has long fixated on constructing this panoramic view of the
customer, amalgamating online and offline interactions to grasp a comprehensive
understanding of each individual and initiate meaningful conversations.

However, this pursuit demands exhaustive identity resolution, substantial data collection, and
rigorous data quality endeavors, alongside intricate data integration implementations. In reality,
a staggering 80% of organizations fail to achieve a Customer360, rendering its pursuit a
questionable allocation of time and budgetary resources.

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KEY TO BUYER SUCCESS:

Start with a Customer101
Rather than the fool’s errand of pursuing a Customer 360, start with a Customer 101- the
introductory level or beginners view in understanding the subject area of customer. With a
Customer 101 the focus is on getting the right data--the data that most matters and the data that
will fuel your initial segmentation, ML and personalization efforts.

With a Customer 101 the Pareto Principle is often in effect. You will likely find that 80% of your
use cases and requirements can be met with 20% of the data you own. Composable CDP buyers
can accelerate their preparedness and the viability of a composable approach via the Customer
101 approach.

Over time, of course, you will add to your understanding of customers with more data. But start
with less, focus on what you need most and then test and learn and augment and expand over
time.

INSIGHT #3
Composable CDP is Not a New Paradigm
Composable CDP proponents might lead you to believe that this is an exciting new approach to
managing customer data and your marketing programs. However, this is just another example
where what’s old is new again. Direct marketers have long been building centralized databases
for marketing execution, analytics, and measurement; connect an orchestration tool to it to
create audiences and distribute to activation platforms.

Before we called this “composable architecture,” we called it a marketing database with

campaign management, statistical modeling and reporting tools built on top.

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KEY TO BUYER SUCCESS:

Pick Your Modules Wisely
Obviously, things have evolved since the original composable Martech stacks - support for real-
time data pipelines, API integration, use of AI, and the channels have grown in number and
complexity beyond outbound traditional direct marketing touchpoints of telemarketing, direct
mail, and email, so we need more modern tooling.

For today’s composable CDP buyers, the tooling and level of sophistication you require is the
first problem to solve. For instance, marketers want to be able to do more in real-time, but can
they truly understand and explain what that means and the ways in which it can be enabled?

Real-time capabilities are not just a singular concept. And real-time isn’t always a strict
requirement. There’s a place in marketing for relevant-time data, real-time data processing that
considers context.

INSIGHT #4
A Composab le CDP Approach is Hard Work
The composable approach does provide clear efficiencies, but also requires real hard work and
investment on the foundational data level. Remember, in a composable world, CDPs have
relinquished responsibility for data management, data quality and ID resolution.

These now become your problems entirely, and no platform, no matter how good, can
compensate for underlying data weaknesses. In addition to solving for data quality, you have to
do the hard work to ensure you have full control of your data with governance, lineage, and
cataloguing, while ensuring compliance and privacy of your customer data.

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KEY TO BUYER SUCCESS:

Consider the Data Requirements Carefully
When data management was handled by the Packaged CDP, considerations for data quality and
data integration could be passed on to the CDP itself. With a composable approach the
requirements for data quality rest squarely with the enterprise. Well prepared buyers will fully
understand the needs of maintaining and cultivating their data store (or Customer 101) and are
prepared to incorporate this responsibility into their overall CDP rollout and deployment
program.

Additionally, given the underlying foundations of the composable CDP approach, the consumers
of data are broader than in a traditional CDP rollout. More consumers of the data mean more
questions to be asked of the data in order to understand what a customer data store must
contain. Requirements should consider the needs across orchestration, activation, reporting,
and analytics.

The future is bright

The providers that are describing themselves as Composable CDPs, such as ActionIQ, Simon
Data, HighTouch, Census and Lytics, are adapting their platforms to the modern data stack.
Making these adjustments is important and helpful for organizations that are ready for a modern
data stack and these providers will be well positioned against the market in the future.

What is not helpful is the additional confusion they create in an already confusing CDP market by
calling themselves ‘Composable CDPs'. These providers should embrace their modularity, and
emphasize the mature capabilities that they provide in creating and deriving value from the data
in the customer data store. Let’s just find a new name or stick to a conversation around
capabilities.

New York Portland

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