The CDP Report 2022

The growing demand on Segment's APIs over the past several years shows us that customer data is becoming an integral part of how businesses power their digital experiences.

From 2017, API volume grew steadily year over year, but the pandemic triggered an inflection point, with late 2020 and 2021 seeing record numbers of API calls on the Segment platform.

Tracking these API calls is a bellwether for many of the secular trends we've witnessed over the past 18 months – streaming, e-commerce, on-demand delivery, and much more – as well as a fascinating way to track the ebb and flow of consumer demand for digital services.

While we don't expect the growth in API volume to be linear forever – it will depend both on businesses' continued investment in digital experiences and the attachment of consumers to them – it's interesting to note that we've yet to see API volume come close to pre-pandemic levels.

More than 25,000 Segment customers use our platform to connect their customer data to over 400 different SaaS apps. As such, we have a bird's-eye view of how the SaaS market is evolving for developer, marketing, and growth teams.

The first trend you'll notice is that it was a strong year for data warehousing tools like Snowflake and Google BigQuery.

A significant rise in data processed on the Segment platform created the need for more storage and processing bandwidth, as well as enhanced analytics capabilities. As a result, data warehouses and analytics platforms saw the largest YOY growth on the Segment platform from 2020 to 2021.

The other notable trend is the continued growth of digital advertising. In spite of shrinking marketing budgets, global supply chain disruptions, and user privacy clampdowns, digital advertising has proved to be remarkably resilient and is expected to grow 31% this year.

Last year we saw clear indications of martech consolidation on the Segment platform, with a growing preference amongst our customer base for integrated suites over best-of-breed solutions.

Our thesis was that the COVID-19 pandemic drove organizations to adapt and simplify their martech stacks to accommodate new shifting customer behavior and new business needs.

Our data in 2021 tells a similar story. Despite the significant increase in data processed by the Segment platform, the median number of apps used was actually down by 9%.

As this trend continues, Twilio Engage, the first overarching consolidation of services into Twilio's customer engagement platform, is our bet on where the market is heading.

As marketers brace for a world without cookies, they are pouring more dollars into Facebook (now Meta), Amazon, Apple, and Google.

Although these walled gardens have robust amounts of users and, therefore, valuable first-party data, exclusive dependency on someone else's walled garden is fraught with challenges.

You're subject to their rules and fees, which may change at any time, while also relying on the data they gather on the audiences you want to reach.

In 2021, our customers showed that using a CDP and leveraging the scale and reach of a walled garden gives you the best of both worlds.

Segment is one of many customer data platforms riding tailwinds from the growing regulation around personal data control and blocking of third-party cookies.

For years now, browsers and government regulators have rung the death knell for third-party cookies (small pieces of code used to track behavior across websites).

Put simply, privacy regulations and browsers are moving towards an internet where it won't be possible to retarget anonymous users with personalized ads across website domains.

In theory, this should spell disaster for advertisers. Instead, it's promoted marketers to rethink their existing strategies and adopt new technologies like customer data platforms that allow them to ethically leverage first-party data to connect with their customers.

Our data shows that over 50% of Segment customers are now using our CDP for advertising purposes.