Customer data platforms (CDP) and data management platforms (DMP) are marketing and advertising tools (in that order). They have similar sounding acronyms and, in some ways, work in the same way. For example, they both capture and organize data, use existing data, generate analysis and reports, and help to create a single customer view. With a CDP and a DMP, digital marketers can personalize their marketing campaigns, see how effective those campaigns were, and drive leads.
But to maximize your marketing results, there are distinct differences between the two platforms that you need to understand.
A data management platform collects, segments, analyzes, and stores anonymous customer data from various sources. Advertisers (mainly) use this unified, segmented data to effectively target (and retarget) advertising campaigns to their intended audience. Designed primarily as an adtech tool, a DMP can also drive product recommendations on your website for each unique visitor.
Examples of how to use a DMP effectively include:
A customer data platform is a marketing solution that collects data from your existing customer database, website, mobile app, and CRM to customize marketing and content for current customers. It's an ideal solution for any/all remarketing efforts.
Both platforms handle first-party data (direct from the customer, CRM and/or marketing automation database, or purchase transactions), second-party data (data provided from other companies, such as partners, resellers, etc.), and third-party data (data from multiple sources).
Both CDPs and DMPs collect the same types of data, but what they target differs. DMPs primarily pursue third-party data (cookies and segmented customer IDs) and then store that data for a short time. CDPs focus on structured, semistructured, and unstructured PII first-party data.
A CDP stores this data over long periods of time so marketers can build in-depth, accurate customer profiles and nurture customer relationships. And a CDP can share and draw data with any system (CRM or DMP) that needs it (and has it) to influence all types of marketing.
User profiles for DMPs segment and categorize people tied to a cookie's lifespan to capture their anonymous behavioral data.
Data selection involves several field values to collect the necessary data. Yet, as part of the field data, DMPs can gather important insights, including when people visited a website, how long they spent there, and what type of information they read on it. But to get the most out of DMPs, you need to turn to analytics tools to extract more patterns.
CDPs avoid anonymous data and focus on specific data that identifies individual customers. An email address is one example of the type of customer identifiers used by CDPs.
Data management platforms Each platform can play a role in your marketing strategy. Through access to historical data, both platforms can illuminate and inform your digital marketing strategy, but in very different ways. For example, DMPs are effective for digital channels and audience segmentation.
CDPs, on the other hand, are beneficial for social media websites, offline interactions, and insights into customer needs and purchase behavior. With a CDP system that manages data, you’ll better understand customer needs and expectations based on their purchase behavior and past interactions with your brand.
A CDP and DMP can work together. However, if you need third-party data for short-term customer leads and conversion, you should work with a DMP. If you seek long-term customer engagement that requires first-party data, you should work with a CDP. Both platforms offer ways to enhance the customer experience (CX) and can help you create, provide value, and maximize return on investment (ROI).
Depending on the type of CDP you select, there are also opportunities to combine these platforms to take advantage of more marketing opportunities. For example, you can use DMP data in real time to personalize the interaction with first-time site (anonymous) visitors to establish and maintain trust. You can also deepen your customer profiles with the third-party data that a DMP delivers.
CDPs draw data from DMPs and share information back with them. The two systems work well together, with DMPs driving in new prospects and leads and CDPs helping brands connect and engage with them. So when a DMP is integrated with a CDP, you can gain access to first-party data that shows what customers are doing beyond their interactions with you. This insight helps you find out more details about what they want or need.