Privacy Regs, Need for First-Party Data Propel Rapid CDP Market Growth in EMEA

CDP growth has shot up recently, and two major factors are the need to wean off of third-party cookies and stricter privacy regulations. The latest Customer Data Platform (CDP) study from the Customer Data Platform Institute shows that the CDP market in Europe, the Middle East and Africa (EMEA) has grown by over 67% between 2020 and 2021.

This story is repeated in the APAC region as well, as companies struggle to capture data from multiple sources, both offline and online, to deliver the best possible customer experiences.

Strong CDP Growth in EMEA

In 2020, there were 40 CDP vendors in the EMEA region with funding of approximately US$ 240 million. In 2021, there were 60 vendors across 19 countries resulting in a growth of 67% and a funding increase of 44% to US$ 564 million.

Revenues for the region in 2021 were expected to be around US$ 570 million. In addition, another $230 million was expected by CDP vendors not based in EMEA.

EMEA vendors comprise 39% of companies, 27% of employees, and 28% of funding compared to the global market.

CDP Verticals Across the Region

In terms of verticals, the biggest CDP implementers are telco, retail, travel, leisure and hospitality, sports, and entertainment. The shift to hybrid experiences (offline and digital) for retail companies is driving the need for a CDP that can bridge all their customer data. Telcos are the leading vertical in Africa due to the significant mobile device usage.

Banking and Finance Now Hot Markets for CDPs

The EMEA region is also starting to see growth in the banking and finance vertical, as well as in many B2B companies. B2B companies in scale-up mode (focused on growth) are the most interested in how CDPs can help them. These companies don’t typically have a lot of technical debt and are use-case-oriented, lending well to a less complex CDP implementation.

CDP Regional Differences

France, the UK, and Benelux are considered the most mature markets, whereas the least mature in CDP adoption are Italy, Spain, Greece, and Eastern Europe. The CDP market in Africa is primarily in South Africa, Kenya, and Nigeria and is driven by companies headquartered in Europe.

The chart below shows that the Netherlands has almost as many CDP vendors as the UK and France, but they are smaller and less funded (especially compared to the UK).

Campaign CDPs Lead the Market

The dominant CDP type in EMEA is the campaign CDP at 40%. Delivery and analytics CDPs total 14 each, and data CDPs total 8.

According to the report, campaign and data CDPs are the least likely to show external funding, whereas delivery CDPs are the largest and most funded companies in EMEA. However, the average funding for EMEA CDPs is lower across all CDP types compared to the US market.

Like the APAC region, delivery and campaign CDPs sales are driven primarily by mid-sized companies looking for a complete solution that includes CDP capabilities.

CDP Market Confusion Continues, Due in Part to Non-CDP Vendors

The customer data platform market continues to grow and evolve in EMEA. As a result, there is a need for more explanations and guidance on the types of CDPs available and the capabilities offered. The report notes that many RFPs include requirements for marketing automation solutions or are too wide and varied for any CDP to support. In addition, there are some marketing automation, BI (business intelligence), and customer relationship management (CRM) vendors who suggest that their solutions are also CDPs, further clouding the market.

CDP vendors and consultants have plenty of opportunities to help clarify the market and guide companies to select the right CDP based on use cases and overall company goals.

Check out the full report to get even more details.