Understanding the Difference Between a CDP and DMP
Consumers have millions of options at their fingertips, and modern web users don’t settle for something that doesn’t capture their attention. Think about how you’ve visited a website, been unengaged, and then navigated elsewhere. How often do you think your own site visitors have done the same?
Standing out in the sea of stuff — useless and useful — that comprises the World Wide Web means harnessing the data we collect, but that can be rough going when your data lacks direction, intent, and organization.
Data-driven insights, data management, and data-informed marketing strategies are popular buzzwords, but improving customer experience is the primary force behind each one. Because modern consumers have so many options, innumerable organizations battle over who’ll create the most meaningful, engaging experiences and how data will be used to create them.
In the era of customer experience, access to and ownership of customer data is crucial for brands that want to build audience relationships and measure the impact of their efforts. Technologies like customer data platforms (CDP) and data management platforms (DMP) can help organizations derive meaning from collected data and strategize accordingly.
Let’s look at key differences between a DMP vs. a CDP and paint a broader picture of their respective uses.
What’s the difference between a CDP and DMP?
Despite each platform collecting and applying data to marketing initiatives, they aren’t interchangeable and deserve individual analysis. CDPs and DMPs each serve distinct functions regarding data focus and functionality. But, first, some definitions:
- Customer data platform (CDP): Collects and unifies data across channels and systems to create a single source of truth for all customer data. It pulls zero-, first-, and third-party data together to build comprehensive customer profiles and update them in real time.
- Data management platform (DMP): Collects third-party data sources — cookie IDs, IP addresses visited, and other anonymous data points — for segmentation to more effectively target those customer segments with paid advertising campaigns across diverse platforms.
The differences might not seem like much, but, depending on your organization’s intent and needs, both platforms offer unique aspects of data management. Zooming in a bit more will help identify the more nuanced differences; let’s split hairs.
Customer data platform (CDP)
CDPs primarily work with first-party data or data collected directly from your users by your company, which inherently offers more control over how you choose to use, label, and strategize with the data. CDPs have three main functionalities:
- Single customer view: Integrate, cleanse, standardize, deduplicate, and house customer data in a single source across online and offline channels to create a complete view of the customer.
- Customer analytics and machine learning: Scale and granularity of atomic-level data is important, but marketers need intelligent data. Predictive analytics can help recognize data patterns and reduce complexity and noise, amplifying marketing intelligence.
- Connect to customer interaction systems: CDPs, either through batch or real-time APIs, serve as customer data’s intelligent backbone to ensure a customer web browsing event — or a store return or a call center complaint — is available in the system to affect changes in communication and customer experience.
The main point of the CDP is that you can store and access data at varying levels of detail. How you choose to do this isn’t limited by the technology itself.
Data management platform (DMP)
DMPs primarily focus on third-party data, anonymous data sold by data collection companies. The data offers less control because it comes as is. You get what you get. Still, third-party data is extremely useful for targeting prospects.
For instance, if you bought third-party browsing data from a data collection company and saw users with certain browsing interests similar to your product, you could use this information to drop targeted ads where they’re browsing. You could certainly argue that DMPs are partially responsible for some consumers thinking ads can read their minds.
Ads can’t read minds, but a DMP can use data that’s freely given to pinpoint interests based on past web behavior. That box you checked and didn’t bother reading? The one about third-party cookies? You consented to fueling the data machine, giving millions of companies the chance to take a swing at your wallet based on data you’ve donated. Some DMP highlights:
- Access to massive data sets: Data collection companies are renowned for capturing all sorts of user data. It’s anonymous data but still valuable when leveraged correctly for targeted ad campaigns.
- Gather new audiences: Third-party data is great for attracting potential customers who didn’t know they were interested in your product — yet. By segmenting profiles based on your organization’s predetermined indicators, you can advertise widely from one platform to various advertising spaces.
- Combine what you know with what you don’t: Compare user data you already have to anonymized third-party data. Use that data comparison to make matches based on web usage characteristics that align customer commonalities with potential prospects. Then target your advertisements and personalize your content accordingly.
A DMP enables your organization to use anonymous data to cast a wider net and reach potential customers who might’ve otherwise been overlooked or who simply didn’t know you existed.
CDP vs. DMP: Which is right for your organization?
There’s no data management skeleton key, and every organization must prioritize its needs before deciding to go with a CDP versus a DMP. Let’s review what we know about them at the highest level:
- CDPs use first-party data to capture single customer views, leading to a data portrait that’s wholly tailored to an individual user and used to build highly personalized digital experiences.
- DMPs use third-party data to match anonymized web behaviors and signifiers to create user segments that can later be deployed in targeted advertising.
I’ve said “versus” a bunch in this article, but these technologies operate just as well together as they do independently. I might even argue that you should consider both solutions in tandem. But, really, it pays to take time to weigh the pros and cons of both systems against your needs as an organization.
Whatever the outcome, one thing is certain: Well-managed data paves the way to better customer experiences across the board. The data’s there; all you have to do is shape it into something meaningful that keeps your customers’ eyes from wandering.
Want to see how it works? Register for a demo and learn how Acquia CDP can help you better use customer data to provide world-class customer experiences.