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Headless CMS Contentstack acquires Lytics marketing CDP
A new digital experience platform forms with the merger of Contentstack and Lytics.
The latest in a long list of customer data platform acquisitions in the last few years, Lytics was snapped up by headless content management vendor Contentstack. The combination of the two creates a new digital experience platform (DXP) to compete with the likes of Optimizely, Sitecore and Kentico.
The deal closed in late December, said Contentstack founder and CEO Neha Sampat. Financial terms were not disclosed. Contentstack, a headless content management system platform vendor, also added generative AI personalization features last year, as it pivots from CMS to DXP.
It makes sense for Contentstack to add a CDP to further its marketing capabilities, said David Raab, founder of the CDP Institute. The CDP market has seen a number of acquisitions during the past few years, the latest being ActionIQ acquired by Uniphore a few weeks before Contentstack bought Lytics.
"It's not shocking by any stretch of the imagination," Raab said. "It's a tough place, being that midsized, independent CDP. ActionIQ just got bought. All those guys have been dropping head count for the last couple years. So, it makes sense."
Despite having a freemium CDP model that attracted new customers, Lytics was likely having a hard time winning new customers, Raab said. Salesforce has cut into the business of larger customers that a midmarket CDP vendor such as Lytics might win, and several entrants into the lower end of the market have cut into smaller customers who might be a fit, he explained.
Lytics was a close partner of Contentstack, as well as other CMSes. Sampat and Drew Lanenga -- former Lytics chief technology officer and current Contentstack senior director of data products -- said that Lytics had partnerships with competing CMSes, and Contentstack had partnerships with competing CDP vendors. All of those partnerships will continue to be supported, they confirmed.
"[Lytics] is a really good fit with Contentstack's headless CMS, which is also composable, so it's a very reasonable and well-considered deal," Raab said. "Every CMS -- and every DXP -- needs a CDP inside; they all require that data to do the personalization properly."
How AI could affect the CDP market
With companies such as Salesforce, AWS and Box claiming that their generative AI can process unstructured data, it might be tempting to conclude that GenAI could conceivably replace CDPs. After all, CDPs are rules-based data engines that add structure and activate data for marketing.
But the CDP as a technology tool isn't going anywhere soon, said Raab, as well as Sampat. CDPs need data sources. Unstructured data is a problem many users have when feeding their generative AI tools to power customer experiences because it can be incorrect or inconsistent, be out of date or obfuscate key details.
GenAI tools and CDPs can work together -- with generative AI finding usable insights in a customer's unstructured data -- detecting details such as preferences or planned purchases, for example -- in places like data lakes or customer service platforms. CDPs organize the data and make those insights actionable for personalized marketing, sales and service.
"To personalize to an individual, you have to understand that individual," Lanenga said. "That understanding is going to be data-driven."
Don Fluckinger is a senior news writer for Informa TechTarget. He covers customer experience, digital experience management and end-user computing. Got a tip? Email him.
