CDP vs DMP – what are the key differences?
- Posted: 12th February 2020
Modern consumers are not interested in fragmented experiences. They expect a unified brand journey that transitions seamlessly between various channels – and sticks to the relevant message at all touchpoints.
For years, marketers worked to create a Single Customer View (SCV) to support this move to unified experience. These focused on first-party data, however, meaning they missed out on much of the wider view of online activity. Then came the Data Management Platform (DMP), which provided a solution to third-party data, but lacked capability outside of anonymized IDs.
More recently, technology companies are offering a solution in the form of a Customer Data Platform (CDP). Not to be confused with a DMP or SCV, the CDP is gaining momentum faster than any marketing technology preceding it. With the promise of a unified, persistent view of individual customer profiles, updated in real-time and accessible by other systems – it’s easy to see the appeal.
For some businesses, weighing up CDP vs DMP may feel like trying to choose between an apple and an apple. But a closer look reveals some important differences between DMP and CDP.
DMPs are designed to collect data from different sources, categorize that data and then segment it for targeted marketing communications.
However, DMPs are typically used to segment data for analysis and distribution via Demand Side Platforms (DSPs) – a type of platform that enables management of digital advertising. By comparison, CDPs enable brands to centralize all their data for more effective, personalized use across a variety of different channels.
Like DMPs, CDPs gather data from multiple sources; the company database, customer relationship management (CRM) system, website and apps – and they help marketers generate customized offers, promotions and emails. However, CDPs go one step further and consume all different types of data and make it available use across the rest of your technology stack in just milliseconds. This enables marketers to react to customers in real-time, with consistent offers and experience across channels.
DMPs are mainly used for third-party data, which means the data has been obtained from a collection of different external sources. While this does widen the data collection, it does present privacy concerns as not all sources can be verified.
Furthermore, DMPs are not be able to verify data because pull it from various sources. As global privacy regulations become more stringent, compliant data processing and storage is a key business priority. Thanks to its ability to unite data into a single customer view (SCV), a CDP is able to conduct identity resolution; verify data and comply with legislation.
A big difference between a DMP and CDP is that the main target of a CDP is first party data. This refers to data that is collected directly from customers who are real people and who have interacted with the company’s website or app. This data is then stored as identifiable and verifiable information such as names, email, contact numbers and so on. True identity resolution is the creation of single, highly accurate customer profiles that brands can then target with hyper-personalized marketing communications.
The focus of DMPs is to segment and categorize customers. As the data is usually anonymous, DMPs make a data selection based on several field values known as probabilistic matching. In other words, it’s more guesswork than fact and can result in spam.
With CDPs, data selection is based on a very specific customer identifier. There is no need for marketers or the software to guess or assume; all the identifiable and verifiable information they need is clearly indicated. CDPs can also ingest online and offline data with no previous data matching required, as well as harness customer analytics and machine learning to help brands create targeted marketing campaigns.
Comparatively, DMPs can typically only provide an anonymous audience. They can ingest both online and offline data, however brands must make sure to match the data with a third-party identifier within the DMP first.
DMPs are really invaluable in capturing generic data such as when a particular customer visits a website, how long they spend on a page, and what they click on. Additionally, they are very helpful for digital channel communications, providing good intel to support prompt marketing decisions. This helps brands reach particular audiences quickly.
The power of CDPs is that they can add greater customer analysis than DMPs. They can determine the probability of converting a visitor to a customer based on their search history and which articles, videos, web pages, and so on, they have viewed. With access to social media platforms and offline transactions, CDPs can also capture social sentiments, as social media activity is tagged with a unique customer identifier.
Don’t let the CDP vs DMP debate delay your marketing efforts. As part of the product suite known as the Tealium Universal Data Hub, Tealium AudienceStream is a marketer’s dream. It centralizes customer data from multiple sources to enable seamless campaign integration for a superior customer experience.
Celerity is an accredited Tealium partner and can assist your business with implementation and integration for fast results. Contact Celerity today for expert advice on how we can help you get the most from your data.