What you need to know

• There is a robust uptake of CDPs in the Asia Pacific, with Australia, Greater China, and India the stand-out markets.
• But despite this, many marketers still struggle with value realisation, according to a new study from Forrester Research.
• Key use cases for CDPs include consent management, ID resolution, and advertising effectiveness.
• Data silos are a challenge, and hidden costs often plague projects.
• The analysts recommend CMOs implement a measurement model and begin tracking relevant metrics early on for improved accuracy.

APAC uptake of Customer Data Platforms (CDPs) is maintaining strong momentum as businesses seek to enhance their marketing strategies and adjust to the new realities around cookies, identity management and privacy policies.

New research from Forrester into regional adoption paints a far rosier picture than the CDP Institute's data earlier this year, although that study looked more broadly than just APAC. According to the fresh Forrester report, the Australian market is one of the hottest for CDPs in the Asia-Pacific region, alongside Greater China and India.

CMOs also want less tech and more marketing in their CDP discussions. According to the report, "APAC marketers prefer CDPs that are tailored to their needs rather than aimed at technical users like data analysts or agencies. They seek marketer-friendly CDPs that marketing teams can directly use and manage, reducing their reliance on IT for external vendors."

Such CDPs offer features like data collection, profile unification, segmentation and activation in a user-friendly interface, says Forrester. And in a hat-tip to an AI-driven future, the report notes, "With advanced technologies like generative AI, marketers can even interact with CDPs in a conversational manner."

But while they may be quick on the uptake, realising value from such investment is proving harder for marketers, says Forrester. To address this, companies are encouraged to adopt a company-wide CDP strategies, prioritise high-impact use cases, and be vigilant about hidden costs associated with implementation.

Regional view

In 2024, 63 per cent of B2C marketing decision-makers in APAC reported increased investments in first-party data collection, a notable rise from 56 per cent in 2021. This shift is largely driven by growing awareness around consumer data privacy and the evolving regulatory landscape. As a result, 23 per cent of marketing leaders now utilise CDPs, with an additional 26 per cent planning to adopt these platforms within the next year.

Australia, Greater China and India boast a mix of mature and rapidly growing markets, with local players in China like Alibaba and Tencent capitalising on their extensive data capabilities to introduce competitive CDP offerings. Meanwhile, Australia has seen traditional Western CDPs such as Adobe, Tealium, Salesforce and Sitecore achieving significant growth, marking a diverse and dynamic CDP landscape across the region.

Sectors characterised by robust customer data ecosystems and a proactive approach to leveraging first-party data such as retail, financial services and consumer goods are leading the way. Notably, the hospitality sector has also witnessed increased CDP investment, driven by a resurgence in travel post-Covid-19.

According to Forrester, a key attraction of CDPs is their ability to provide customer analytics, which is becoming an essential feature for marketers. The demand for insights into consumer behaviour and preferences is escalating, prompting marketers to utilise CDPs to obtain deeper analytical capabilities. This includes predictive analytics powered by AI and machine learning, which can significantly enhance customer engagement strategies. 

Key Use Cases Driving CDP Adoption

1. Customer Analytics: The most prevalent use case for CDPs is customer analytics. With marketers seeking deeper insights into consumer behaviours and preferences, CDPs are becoming pivotal in aggregating and analysing first-party data. The demand for predictive analytics powered by AI and machine learning is particularly high, allowing businesses to anticipate customer needs and tailor their offerings accordingly.
2. Single Customer View: Achieving a unified view of the customer is essential for effective marketing. CDPs enable organisations to consolidate data from various sources, creating comprehensive profiles that inform personalised marketing strategies. This single customer view is crucial in enhancing customer engagement and loyalty.
3. Content and Offer Personalisation: CDPs facilitate the personalisation of content and offers, which is vital in today’s competitive landscape. By leveraging detailed customer profiles, companies can deliver targeted messages that resonate with individual consumers, thereby improving conversion rates and customer satisfaction. 
4. Data Orchestration: The ability to orchestrate data for customer audiences is another significant use case. CDPs allow marketers to segment their audiences effectively and activate campaigns across multiple channels, ensuring a cohesive customer experience. 
5. Identity Resolution: While not a traditional feature of CDPs, identity resolution is gaining traction. This capability involves integrating various identifiers with behavioural and transactional data to create a comprehensive consumer profile. Marketers are increasingly looking for CDPs that offer customisable identity resolution features to enhance their targeting capabilities.
6. Consent Management: With rising concerns over data privacy, the integration of consent management features within CDPs is becoming a vital use case. These functionalities ensure compliance with emerging privacy regulations and help organisations manage consumer consent effectively. 
7. Advertising Use Cases: CDPs are also being utilised to optimise advertising efforts. By incorporating third-party data, businesses can enrich their first-party profiles and create microsegments for more precise ad targeting. This strategic approach has proven beneficial in enhancing ad performance and return on investment.

Challenges

However, the journey to fully realising the potential of CDPs is not without its challenges. Many organisations find value realisation from their purchases often delayed or limited.

And, say Forrester's report authors, "Fragmented digital and marketing ecosystems, large populations, and dynamic mobile-first markets mean that APAC marketers need CDPs to handle large datasets and process data rapidly. Assess potential hidden costs, including customisation and configuration, integration with existing systems, data migration, streaming volume, and training and ongoing support." 

To address these problems, experts also recommend a company-wide CDP strategy that breaks down silos across departments, prioritisation of use cases for quicker ROI, and the adoption of effective measurement models to evaluate the return on investment. 

With APAC marketers seeking to optimise ad targeting and enhance customer engagement, the incorporation of third-party data into CDPs is also gaining popularity as brands seek to enrich first-party profiles, creating more precise microsegments for targeted advertising efforts. This approach has proven beneficial in enhancing ad performance and return on investment, says Forrester. 

"They can use enriched profiles to create precise microsegments, syncing audiences across ad platforms including walled gardens, or use microsegments as seed audiences to boost the effectiveness of lookalike modeling. AIA used CDP to improve targeting, tripling its Facebook call-to-action response rate. Firms can also use first-party data for audience suppression to optimise return on ad spending which offers AIA as an example, saying it used CDP to improve targeting, tripling its Facebook call-to-action response rate."