Twilio Segment, the world’s #1 Customer Data Platform (CDP), today published The Customer Data Platform Report 2022. The third annual report, which reflects the findings of anonymized platform usage data from Twilio Segment’s 25,000+ customers, finds aggressive adoption of CDPs over the past year as businesses build digital-first customer engagement strategies and reduce their reliance on third-party data.

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“Companies have been confronted with two major challenges – evolving their tech stack to deliver world-class customer engagement, and adapting to stricter privacy regulations that force companies to rebuild their existing data strategies, but still offer personalized experiences”

Over the past few years, companies have been forced to reimagine the way they engage with customers and create personalized, digital experiences. This has created an explosive demand for CDPs. The volume of API calls on the Twilio Segment platform has been growing steadily year over year since 2017, but 2020 was an inflection point, with record numbers of API calls on the platform in late 2020 and 2021 reaching over 1 trillion a month.

The report also evaluated specific industries and found the shift of customer interactions from in-person to online is here to stay, with retail customers reporting data volume surge by up to 1,000% during seasonal ecommerce events like Black Friday and Cyber Monday.

“Companies have been confronted with two major challenges – evolving their tech stack to deliver world-class customer engagement, and adapting to stricter privacy regulations that force companies to rebuild their existing data strategies, but still offer personalized experiences,” said Katrina Wong, VP of Marketing for Twilio Segment. “CDPs are now mission-critical because they offer access to great, accurate, and compliant first-party data, enabling companies to not only compete, but thrive, in a digital-first world.”

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The death of cookies is a boom for CDPs and a new opportunity for marketing

The death knell has been rung for third-party data. Between increasing privacy regulations and the shift to a cookieless future across apps and browsers, embracing first-party data is now becoming a must for any business.

Although this shift should have spelled disaster for advertisers, companies and marketers that want to build digital-first customer experiences are exploring new approaches and adapting new technologies. CDPs have become pivotal because they enable businesses to leverage first-party data, while prioritizing privacy and personalized customer engagement, making them an increasingly preferred choice for marketers everywhere.

As marketers brace for a world without cookies, they are also turning to the advertising services of Google, Facebook, and Amazon. These walled gardens have a robust amount of users and are some of the most prominently used apps on Twilio Segment. The combination of these top apps plus the increasing demand for CDPs shows that tapping into the scale and reach of a walled garden is critical to activating, converting, retaining, and growing customers.

The great stack reshuffle: more data, less apps

In the past year, there has been an explosive increase in data processed and API calls across all businesses, including streaming, e-commerce, on-demand delivery and more. Despite this record growth in data volume, the median number of apps used actually decreased by 9%, showing companies are looking to reduce martech sprawl.

As a result, there have been more companies sending data to digital advertising and data warehouse tools from the Twilio Segment platform to streamline data efficiency. This evolution was triggered by the need for more storage and processing bandwidth, as well as enhanced analytics capabilities, with the rise in data volume. In the past year, the categories of data warehouses and analytics platforms saw the largest YoY growth on the Twilio Segment platform as integrations.

Additionally, the report found that over 50% of Twilio Segment customers are now using CDPs for advertising purposes, with the most popular applications being: