Best Practices

CDP vs data warehouse: There's no debate; warehouses win | Census

Nicole Mitich
Nicole Mitich June 05, 2023

Nicole Mitich is the content marketing manager @ Census. She's carried a love for reading and writing since childhood, but her particular focus is on streamlining technical communication through writing. She loves seeing (and helping) technical folks share their wisdom. San Diego, California, United States

Ah, the mighty customer data platform (CDP), the ultimate tool for organizing and managing customer data – or is it? 

A decade ago adopting a Customer Data Platform (CDP) made sense: Your business was collecting more data about your customers than ever before, yet your teams weren't able to access and activate it. CDPs were touted as the silver bullet for teams looking to create a unified view of their customer base. 

Today, you’re still collecting more customer data than ever before, but the landscape for managing that data has changed dramatically.

If you’re already storing all your customer data in a data warehouse, like Google BigQuery or Snowflake, and using tools, like dbt, to transform it, what’s the point of a CDP versus a data warehouse? 🤔 A warehouse doesn’t offer the same potential for data activation that a CDP does, at least, not by default. But that doesn’t mean that it can’t. With an alternative solution like data activation powered by reverse ETL, a data warehouse can function even better than a CDP.

Let’s compare some of the problems that CDPs aim (and fail) to solve and why activating data from your modern data warehouse with reverse ETL is a better way to unlock its potential.

The problems with CDPs

While CDPs have been hailed as the magic bullet for marketing teams, promising to unify all customer data into one accessible platform, they have their share of limitations and challenges (to put it lightly). So, we’re pulling back the curtain on some of the less-discussed issues with CDPs.

A CDP isn’t always a CDP

The goal of CDPs was to offer unified customer profiles, based on trusted customer data, without engineering. In practice, however, CDPs often specialize in different aspects of data management and activation. 

Many CDP vendors use definitions unique to them and emphasize specific features of their platforms, making them heavy on hype and buzzwords and light on clarity and customization. Some products that position themselves as CDPs are really only offering an additional resource for data analysis, rather than an all-in-one solution. Others share overlapping functionalities with marketing and data management tools, like Data Management Platforms (DMPs), Customer Relationship Management (CRM) systems, and marketing automation platforms.

In reality, buying a CDP today means buying a set of vaguely related customer data tools. It can be hard to know exactly what you’re getting. 🤷

CDPs don’t really provide a single source of truth

Though many CDPs claim to provide a single source of truth, that’s often not the case. Most don’t offer the same functionality that a suite of business intelligence tools can, so many businesses find they still need to use those tools in conjunction with a data warehouse or data lake alongside their CDP. 

There’s another source of truth right off the bat. 🙄

A data warehouse, on the other hand, can be used in conjunction with a Data Activation platform like Census to generate reports that are easily composable and digestible and that reveal insights from ALL of your customer data, across all sources within your organization. In other words, something much closer to that “single source of truth” that many CDPs claim to offer. 

CDPs don’t provide much flexibility

We’ve written before that CDPs require a significant initial investment of engineering time and resources to set up. And when you’re buying a legacy CDP, you’re also forced to evaluate everything upfront because you’re locked into a single platform.

But to use a CDP, you may also need to force your customer data to conform to a rigid structure. This might appear efficient at first, but businesses come in all shapes and sizes, meaning they require much more flexibility than what these CDPs can offer.

With most CDPs, it’s their way or the highway. If a CDP doesn’t offer the features you need, and you can’t find a way to integrate tools that do, you might find yourself looking for a workaround that doesn’t exist.

Turn your existing data warehouse into a CDP 

Your data warehouse already has many of the features an off-the-shelf CDP would provide, including data collection, data management, data transformation, and data governance. It’s also the one place that can rightfully claim to be the “single source of truth” for customer data.

All you need is a way to move data from your warehouse and make it accessible to all teams across your company, so they can activate and operationalize it across all their channels.

Data Activation platforms like Census enable teams to unlock data directly from the warehouse – without needing to know SQL — while still empowering data teams to maintain governance throughout your data stack rather than relying on a third-party CDP to ensure compliance.

In the battle of CDPs vs data warehouses for unifying and activating customer data, the data warehouse has won. 🏆 When combined with a Data Activation platform powered by reverse ETL, your data warehouse acts as the source of truth for customer data, and a place from which to activate that data across your business.

💡To find out more about building your own CDP with Census, get in touch or schedule a demo. We’ll talk you through the whole process.