Breezy Briefings is pleased to present a brand new essay series by Abraham George titled Why Data Is The New Oil? Subscribe using the button above or Telegram to receive the latest updates as soon as it is published. This is Part 4 - if you missed the previous parts, check out Part 1, Part 2 and Part 3.
I’m getting into the meat and potatoes of our discussions now. With third-party cookies getting out of the way, the focus will be more on first-party data. The way they sort and analyze this data to granular levels will determine the success or failure of those companies in this space. The technology that will lead this game is known as the ‘Consumer Data Platform’ (CDP).
CDPs are a lot like CRM but there is a significant difference. CRM software allows businesses to manage and optimize interactions with customers. The main difference is that nearly all the data in a CRM is input by the business whereas CDPs take user-generated data and organize it. Salesforce is the biggest CRM company. User-generated information includes how much time a person spends on each site, what they looked at, and if they left any access details like e-mail address, shipping details, etc.
With this information, businesses can run analytics on certain aspects of their sales force. These analytics can become very granular and personal. A good CDP company will run these through their AI/ML model and can come up with a very individualized marketing plan for each sales project.
The growth in this sector is going to be phenomenal. Marketing budgets will shift from using third-party data to more direct marketing. This shift is going to be very significant. Studies and surveys show collecting first-party data has become the major priority for marketing budget allocation. If a business is not collecting data in the right way and in the best-optimized format effectively, they are throwing good money after bad. The CDP market is headed to grow in leaps and bounds. There is a $400 bln marketing budget out there. Most businesses know they have to change their marketing. They know they have to do something but don’t know how to do it.
The CDP industry is currently small. It is about $3.5 bln but is expected to grow close to 35% for the next five years. The CDP industry is expected to grow to at least $15.5 bln by 2026. The leading company in this space is called Segment. And who owns Segment? You guessed it - Twilio. Stay tuned for the next report.
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Abraham George is a seasoned investment manager with more than 40 years of experience in trading & investment and multi-billion dollar portfolio management spanning diverse environments like banks (HSBC, ADCB), sovereign wealth fund (ADIA), a royal family office and a hedge fund. Currently, he is setting up a hedge fund where foreign citizens can invest in Indian growth stocks like Tanla operating in hyper-growth markets like CPaaS.