CDP vs DMP: What Are The Key Differences?

In the new world of digital marketing, data is kingOpens a new window .

Marketers are increasingly embracing data-centric approaches to their operations as they look for ways to reach their target consumers with personalized content. In large part, the ascendance of data has been driven by brands looking to stand out from their competition and show their customers that they’re putting them first.

With the data revolution in full swing, however, the tsunami of available consumer data can be overwhelming. Knowing how to manage, not to mention knowing, what to do with all that information can be daunting.

As fellow Toolbox contributor Pierre-Yves Lanneau Saint Leger explains, “one report from multimedia platform MynewsdeskOpens a new window  found that of more than 1,000 marketers, PR professionals and business owners surveyed, fewer than one in five considered themselves as having a high degree of data literacy…And data literacy in that study wasn’t referring to data expertise. Rather, it’s the ability to understand and assess data presentations, which is alarming.”

Enter martech. In recent years, a growing number of tools have come to market that not only collect and organize data for marketing teams, many even help find ways to make use of the most pertinent data for company-specific objectives.

Two of the biggest technologies employed by marketers to this end are Customer Data Platforms (CDPs) and Data Management Platforms (DMPs).

While many of us are aware of these platforms, too few of us understand the key differences between a DMP and a CDP. They may sound similar — and they even share some common attributes — but these systems vary in many ways.

What is a DMP?

Data Management Platforms have been around for much longer than CDPs and have become key tools of many marketing stacks.Opens a new window  As the first technology that helped companies gather, manage and classify high-value consumer data from multiple sources, DMPs were long-considered one of the most useful tools for digital marketers and advertisers.

DMPs are used by marketers, advertisers and publishers to collect, store and classify consumer and campaign data. These platforms then segment that information for marketers to better target customers.

As Steve Zisk writes for CMSWire, “companies can use DMPs to identify and target specific audiences according to device IDs, look-alike targets based on segmented audiences or digital targets. These platforms are known for using ad networks to reach anonymous customers, broadcasting a specific ad based on established rules and then capturing the results.”

Given that these types of systems work best with new or anonymous audiences, they’re especially useful for advertising and acquisition campaigns.

What is a CDP

As a younger technology, CDPs have attracted loads of attentionOpens a new window in the world of martech.

The primary function of a CDP sets it apart from a DMP. While DMPs are used primarily as advertising platforms, CDPs leverage first-party data to improve consumer targeting across the customer journey.

Simply put, CDPs track and organize the data of a company’s real customers. For example, the platform gathers data from multiple online and offline interactions with consumers — such as from the company database, CRM, websites, apps or transactional systems — and matches them to a single profile.

This information then can be used by marketers to prepare personalized marketing material or to send customized offers, promotions and e-mails to an individual. CDPs can also help to design and deliver customized web content to specific consumers.

Thanks to their ability to guide comprehensive data-driven marketing to a new level, CDPs have become increasingly useful to marketers who want to combine their most valuable customer data for marketing — and other — uses.

For instance, as Aimee Bos explains, “your CDPs’ ability to stitch customers across devices make personalization use cases very compelling. Personalization efforts will help improve customer experience and deliver a consistent brand message. Your CDP can be used to deliver retargeting incentives or to help support GDPR complianceOpens a new window .”

To CDP or DMP?

While CDPs and DMPs can often complement each other, figuring out which one to invest in comes down to identifying your company’s marketing needsOpens a new window , understanding your desired goals and objectives and defining your expectations.

If you’re after long-term customer reach and personalization to make the best use of first-party data, a CDP is for you. Alternatively, if you’re more focused on leveraging third-party data from vendors, DMPs make the most sense.

If you’re trying to figure out which one is for you, I recommend taking a look at this list of comparisons to consider from Amy Cross:Opens a new window

 CDPs can be integrated with different systems for advertising	 DMPs cannot perform advanced identity matching
 CDP stores data in a single place, making them flexible and fast to analyze	 DMP stores data in two places, complicating efforts at integration
 CDP gets raw data and builds historical information on it	 DMP gets high-level data which is often short-lived
 CDP is a differentiator and can capture data anywhere in the customer cycle	 DMP is an equalizer and will retrieve the same data for a set query
 CDP can disclose new customer traits that can be used for personalized marketing	 DMP stores anonymous user profiles and can only segment the audience
 CDP can store contextual, demographic, as well as historical data	 DMP can extract only segmented data based on different categories