As modern customers interact with your brand across dozens of different channels, they expect a unified and seamless experience across all touchpoints. In order for organizations to deliver on this expectation of a unified customer experience, they need the appropriate technology platforms in place to allow customer-centric marketing strategies to be implemented.
The standard martech stack needs to be anchored in solid data management solutions that will enable customer data to be integrated from all channels to help inform highly-targeted and personalized advertising and marketing campaigns. Data management solutions like the digital management platform (DMP) and customer data platform (CDP) allow companies to create a detailed view of their customers so they can engage them with the right message at the right time.
But these data management systems have some significant differences in functionality and potential applications, so before you run out and buy an expensive solution make sure you know if your company really needs a CDP vs. DMP.
According to Tony Byrne, martech analyst and Founder of Real Story Group, DMPs are all about collecting anonymous data, while CDPs are focused on 1st party data, or personally identifiable information (PII). DMPs are focused on acquisition marketing applications, like direct mail, advertising, and data exchanges, while CDPs are focused on the full customer lifecycle, and are more flexible than DMPs in terms of the number of applications they can be applied to.
Byrne provided an interesting analogy in comparing the two platforms - Think of a CDP as your own park and garden that you control and know who is in it (PII), vs. a DMP which is like a public park, where it is a shared space and the people in it you do not know (anonymous).
Related Article: What is a Customer Data Platform (CDP)?
What is a DMP?
A data management platform (DMP) is a data management system used to gather, categorize and classify audience and campaign data from multiple sources, allowing marketers to target customer segments more effectively in ad campaigns. DMPs enable marketers to centrally store data such as cookie IDs and, with programmatic ad buying, use ad networks across thousands of sites to target audience segments and optimize campaign performance.
What is a CDP?
A customer data platform (CDP) is a data management system that has a persistent and unified database whose function is to consolidate and integrate customer data from multiple channels in order to build a unified profile around an individual customer. Structured data from a CDP is delivered to other martech systems to enable features like personalized messaging campaigns.
Related Article: Understanding the Key Components of a Customer Data Platform
What is the Difference Between a CDP vs. DMP?
One of the main differences between a CDP vs. DMP is a CDP is all about managing an individual customer with a single profile, while a DMP is about managing segments of customers with anonymous profiles. DMPs work mainly with anonymous data such as cookies, device IDs and IP addresses, while CDPs can work with both anonymous and known individual data (e.g. names, addresses, email, phone). CDPs typically have more advanced unification algorithms built-in so user data can be combined into unified customer profiles that are persistent over time.
Joe Stanhope, Forrester VP and Principal Analyst, Enterprise Marketing Technology cautions us to remember that DMPs have been around for a while and are a mature category, while CDPs are a new phenomenon and are not fully defined yet. The terms CDP may mean different things to different people, so he encourages vendors and marketers to develop a common language. He also tells us that while CDPs are mostly focused on marketing applications currently, in the future they needs to have a more expansive focus on the full customer experience (CX), on- and off-line. Brands he says need to evolve into looking at a unified CX across all touchpoints, digital and not digital.
In the end, it's not about CDP vs. DMP, but having an understanding of the benefits and drawbacks of each platform, and applying them to the right use-cases for your business. DMPs are designed to work with ad networks allowing you to target anonymous segments of your customers, while CDPs allow you to profile an individual customer and create a unified and persistent profile around them. Working together, a DMP can be thought of as another channel to feed customer data into your CDP to create more progressive and persistent customer profiles.