What are the main differences between a CDP and a DMP?

DMP and CDP have different purposes, but many marketers don’t know what they are. When it comes to marketing in today’s digital world, playing catchup is near impossible as innovation moves new technology forward at a quick pace. What is new and mainstream one day will become outdated so fast that once you develop any expertise in one, something new pops up and disrupts everything you knew.

In case you’re wondering what these new innovative terms are, DMP or data management platforms and CDP or customer data management are similar as they claim to collect, segment, unify, and activate customer data. Is there a real difference between the two? Yes. Most of it is the type of data that each platform deals with and how this data is often utilized.

The Key Differences

  1. The Data Type – Customer data management usually deals with 1st party PII level data, while data management platforms will handle 1st/2nd/3rd party data that is anonymized. Each record in customer data management is tied to or gets linked to a PII level identifier. This can be an email or a phone number. Data management platforms utilize device IDs, IP addresses, and browser cookies. This all translates as CDP is revolved around a person while DMP record deal more with anonymity.

  2. The Audience – Data management platforms will make sure you reach a new audience more efficiently. Customer data management will help target your existing customers better. Data management platforms use their integrations with 2nd and 3rd party data sets to help you create look-a-like audience groups. Customer data management is more efficient at targeting your current customers across numerous channels based on phone numbers or emails.

  3. The Activation of Data – Data management platforms activate data mostly for advertising purposes. They work best at activating data through your DSPs. Customer data management works from site personalization, push notifications, email marketing, and others when a customer is identified. They also push data in its purest format to other platforms when needed for running external business intelligence analysis.

  4. The Retention of Data – Data management platforms base their records on browser cookies. This makes its record valid for the life of the cookie, which can run 30-90 days. Customer data management bases its records on email or phone numbers so the retention of data is considerably longer. With this, you can create more customization based on your company’s needs.

  5. True Single Customer View – Customer data management will ingest data from websites, email marketing platforms, mobile apps, call centers, CRMs, and whatever channel your company may use to interact with a customer in one place. This creates a true single customer view. Data management platforms only stitch together customer data wherever a record is tied to an anonymous identifier if the DMP understands it. Customer data management’s most significant advantage is its omnichannel data switching that could be configured by a technical marker without too much involvement from your IT department.

  6. Cross-Device Identity – Data management platforms work on a probabilistic approach when it comes to matching records of customers in other devices. This can be visiting a website from a desktop and also from a mobile device. Customer data management is more deterministic. This same customer must log-on using the same ID on any device. This means the DMP is less accurate and the date is short-lived as cookies have a much smaller lifespan.

  7. Ingesting Data – Each platform ingests data online and offline. DMPs must be matched with a 3rd party identifier like a cookie ID whereas CDPs do not. CDPs also stitch historical behavioral data once a customer identifies themself. It can also stitch together browsing history with the user once they are signed in.

  8. Data Portation – CDP’s can easily configure data to be passed to a platform. DMPs, however, could only pass cookie IDs of specific segments if they “match.”

Reasons to Choose a CDP Over a DMP

  • A true single customer view. Your customer’s data can be managed universally and not separately for each platform.

  • Storing and activation work with 1st party data like emails and phone numbers.

  • The segmentation of any data is based on your customer’s attribute. This can be nationality, gender, age, family status, etc. Also, with events like pages browsed, products bought clicked in an email, engagement in a specific campaign or orders placed.

  • All data can be applied to the whole marketing stack instead of just advertising online.

Though data management platforms and customer data management have different purposes and areas of use, many marketers and companies may not know which one to use. The digital work is an ever-evolving place, and keeping up with the latest innovations is essential to stay ahead of the game. As soon as you master one, a disruption occurs and you will find yourself scrambling to get a hold of this new technology. While this is part of the process, it makes developing any expertise close to impossible.

Many new technologies look to solve problems that are quickly done with existing ones. Learning how to maximize and use the current ones can be just as helpful and perhaps better than always embracing every new thing that enters the digital marketing world. But when it comes to customer data management or data management platform, either one will be dependent on your needs and if you need them.

It all comes down to how the data you have will be utilized and how often. Making sure you use the right tech for your needs will help your overall business strategy and help your brand move forward in this digital market evolution.

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