CDP Vs. DMP: Complete Overview of the Data Platforms for Your Business

Syncrasy Tech
May 13, 2020

Customer Satisfaction is one of the factors we need to ensure the continuity of our business. With the advancement of the business industry, ‘customer is king’ means more than just good customer service. Consumer satisfaction is very dependent on personalized customer service that is one area where businesses with a devoted team can use some tactics to build audiences for marketers. To build strong customer relationships and drive brand success, it’s time to consider customer data platforms, or CDPs, and data management platforms, or DMPs.

However, users can find Customer data platforms and Data management platforms quite confusing with each other. Since they both use data to build audiences for marketers. What are the differences between the two platforms is the kind of data each one uses. And those different types of data mean that the two platforms have to be used in different ways by marketers.

 

What is a CDP?

A customer data platform (CDP) is a data management system that marketers use to collect & manage data in one place. A CDP platform has a unified database whose function is to consolidate data from external systems in order to use that data around an individual customer. The benefit of implementing CDP on your ecommerce website is that this can improve your customer targeting by taking data from the specific segments of your audience.

What Are the Features of a Great CDP System?

  • CDP uses the concept of identity to build a customer profile.

  • It supports features of data cleansing, data transformation, and data enrichment.

  • Data centralization can be done using a CDP system with an API that allows for the searching of ingested events and user attributes.

  • CDP offers the ability to decide the customer segmentation by taking attributes ingested in the platform.

  • CDPs allow data integration between different systems.

 

What is a DMP?

A data management platform (DMP) is a system that allows organizations to consolidate data from a variety of sources and segment this data in ad campaigns. DMPs enable e-marketers to centrally store this data across thousands of sites and use this data further to target audience and optimize the performance of the marketing ad campaigns. In other words, a DMP store and manage information about users who visited your business websites and are the target of your marketing ad campaigns.


What are the Features of a Great DMP System?

  • A data management platform (DMP) understands customer demographics including behavioral, geographic, and profile data.

  • A DMP collects data from all touchpoints you have with your customer.

  • Help you manage customer data and execute ad campaigns.

  • Enable marketers to design targeted ad campaigns and extend their reach across multiple platforms.

  • Help you get a multidimensional view of customers’ data and prospects.


CDP Vs. DMP

5 Key Differences Between CDPs and DMPs

While CDPs and DMPs are different from each other, figuring out which one is the best fit for your firm comes down to identifying your business goals, marketing needs, customer segmentation objectives, and understanding your expectations.

For companies that are looking to create a long-term customer reach and engagement by using data, then a CDP is the option for you. And, for companies that are more focused on leveraging data from the third-party ad-campaigns and vendors, then DMPs is the best bet for you.

Are you trying to figure out which one is right for you, have a look at this list of comparisons to decide between CDP and DMP?


Data Types & Functions

Image Source: NextUser

Customer Data Platform leverages first-party data direct from the real customers of a company. A CDP collects data from the company CRM database, websites, mobile app sign-ups, customer past transactions, and transactional systems. A CDP platform can also be used to create web content for your business website that is viewed by the customers when they logged into your website.

On the other hand, a DMP uses data from second and third-party sources to serve the function of advertisement platforms. It collects data from different third-party sources such as IP addresses, cookies, and mobile device IDs. The second-party data is collected from your business partners and another company. The platform then consolidates, categorizes,classifies, and segments that data for marketers so that they can target customers in different categories.


Data Retention Strategy

Data retention is one of the main factors that differentiate between CDPs and DMPs and how these platforms retain data. The CDPs allow users to set and retain customer data on the basis of how long their customer's data is held. CDPs provide data for longer periods when it becomes more useful for the user. This data can be used in marketing for more relevant outcomes.

Let’s understand with an example, suppose you run a retail store and sells luxury clothing items. At the start of the new year, you decide that you want to give a discount to your regular customers from the past year. But how do you know about your most privileged and regular customers? This is where a CDP can help you retain transaction data that is stored in the platform to find your customers' spent history with your retail store in the past year.

On the other hand, the DMPs are best to retain data for a short period of time. It can be for up to 90 days or more. It is great to use for marketers and advertisers that are looking to target customers. Suppose, you have a travel portal that offers travel holiday packages, air travel, etc. If you are looking to market your services, then you need data of people who have traveled recently in the past 90 days.

Personally Identifiable Information (PII)

Image Source: Segment

When we talk about the biggest differentiator for CDPs and DMPs, it is their function of customer identities or personally identifiable information (PII).

The PII or personally identifiable information is a data type that identifies a specific person by using a phone number, social security number, house address, or email address. A CDP gathers all the required information of every person who is in your audience. It collects more and more information about your customers that will make your marketing strategy more relevant and easy to implement. So here we can say that a CDP relies on PII or personally identifiable information to collect transaction data, customer interactions, and more.

Implementing a good CDP on your website gives you access to strong data security. And helps you make sure that your website visitors also know about your data collection strategy. A CDP also gives you the ability to delete user data if a user asks you to do so.

DMPs, on the other hand, don’t use PII to collect data, but they also collect data from third party sources, so it is important for marketing teams to confirm that the data collected is ethical or not.


User Profile Segmentation

Image Source: Pointillist

User profiles segmentation on CDPs is based on the customer identifier. For example, a CDP identifies a customer using an email address, SSN number, or contact number. Since this data is the same across the entire data set, it provides deterministic matching of customer information and customer analytics for targeted marketing campaigns.

The DMPs are totally different from CDPs and provide anonymous data for marketing ads. The user profiles segmentation for DMPs is based on collecting and categorizing the customers’ data for the last 90 days, at most. Since the data segmentation is anonymous, the DMPs search data using probabilistic matching.


Data Capturing & Updates

CDPs are capable of capturing user information by analyzing customer communication, purchase transactions, and by utilizing AI and machine learning to understand content affinity based on the customer’s behavior to visit the store and search for specific products. CDPs can be tagged with a unique customer identifier to search for information stored in the historical data and also have the added advantage of accessing social media advertising, etc.

Whereas the DMPs are useful in capturing generic data about a visitor who visited your website. DMPs allow marketing teams to make decisions based on customer data and to reach a particular audience. DMPs can only push data to add networks, whereas CDPs are capable of both pick-up and push-out data from different sources. CDPs allow real-time updates for data, whereas DMPs support scheduled updates for the complete database.

 

Summary

Ultimately, CDPs and DMPs both bring distinct value to marketing efforts. You may use both platforms to some degree in your marketing. You can use CDP for detailed monitoring and categorizing of data of your website visitors, while you can also use a DMP to build strong advertising campaigns. So, if you are interested in learning more about CDPs and DMPs or want to implement a PIM solution on your website, then request a demo today with us.

We are team Syncrasy Tech that makes sure the requirements you're having for CDPs, DMPs, and PIM implementation should be implemented perfectly by identifying your business needs. Need help with web development and PIM implementation for your business needs? Reach out to us here.

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