Two popular martech tools have quickly risen up the ranks in the past decade: the customer data platform (CDP) and the data management platform (DMP). While both tools share similar features, it’s important to call out some key distinctions between CDPs and DMPs so that you can make an informed decision on acquiring the right tool to best suit your organization’s needs.
In this article, we tackle the key differences between CDPs and DMPs, the primary users of each, common use cases, and several vendor examples.
Customer Data Platform (CDP)
What is it? According to the CDP Institute, “a Customer Data Platform is packaged software that creates a persistent, unified customer database that is accessible to other systems.” Critically, a customer data platform not only offers a centralized place to house first, second and third party customer data, but it also makes it easy to take action off that data with its ability to send and sync the data across different "destination" tools.
Who uses it? Why? Marketing teams that focus on engaging and retaining prospects and customers can use a CDP to improve their understanding of customers and run more informed, efficient, and personalized marketing campaigns.
Do you need it? Any business with customer data sitting in multiple systems can benefit from a CDP, as this platform brings together all that data to create a true single customer view. In doing so, a CDP makes it easy for marketing and sales users to better understand customers and take action accordingly. A CDP also streamlines processes and simplifies reporting because it allows users to view and take action on data in one place.
What are some examples of a CDP?
- Hull for B2B
- mParticle for B2C
- Zaius for B2C
Data Management Platform (DMP)
What is it? A DMP aggregates and organizes second and third party data from a variety of systems. Although it sounds similar to a CDP, the two platforms are actually quite different. The key difference lies in the fact that DMPs serve one core purpose: To segment data from different external sources to build intelligent groups of customers for use in advertising campaigns. Further, a DMP only holds data for about 90 days (the lifetime of a cookie). Meanwhile, a CDP serves a variety of purposes for understanding and taking action based on data and can act on historical first party data from any point in time.
Who uses it? Why? Marketers and marketing agencies can use a DMP to power advertising efforts, for example by using it to create a “lookalike” audience for customer acquisition.
Do you need it? In some cases, you can use a CDP and DMP together, with the DMP focusing on third party data for paid advertising campaigns and the CDP focusing on all other marketing activities. However, if your goal is to focus primarily on your own first party customer data to develop long term campaigns that engage prospects and customers over time, then you need a CDP -- not a DMP.
What are some examples of a DMP?
- Adobe Audience Manager
- Oracle BlueKai
CDPs vs. DMPs At-a-Glance
|Attribute||Customer Data Platform||Data Management Platform|
|Definition||A CDP is a packaged software that creates a persistent, unified customer database accessible to other systems. It offers a centralized place to house first, second and third-party customer data and makes it easy to take action off that data.||A DMP consolidates second and third-party data to segment customers for audience targeting across advertising channels.|
|Personally Identifiable Information (PII)||Anonymous and Identified Data||Anonymous Data|
|Business Focus||B2B; B2C||B2C|
|Use Case||Direct prospect and customer engagement as well as taking action based on combined data from GTM systems.||Acquisition via advertising and “lookalike” audience creation.|
|Users||Marketers||Marketers; Marketing agencies|
|Data Sources||Website, CRM, marketing automation, sales enablement tool, data warehouse, data enrichment, and more||Primarily cookies, IP addresses, and device IDs|
|Data Types||1st, 2nd and 3rd party||Primarily 2nd and 3rd party|
|Data Retention||Long term; historical||Limited; short-term (lifespan of a cookie)|
|Examples||Hull, mParticle, Zaius||Adobe Audience Manager, Oracle BlueKai, Lotame, Facebook|
Selecting The Right Tool
Modern marketers have a plethora of data tools at their disposal, each designed to meet unique needs and use cases. Is your organization focused on acquiring new users or customers? A DMP is likely what you'll want. Does your organization need a way to track touchpoints and identifiers for each customer in a single, consolidated view? A CDP is your best bet. Many organizations have opted to implement both a CDP and a DMP in order to meet different requirements and goals.
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Angela is the Director of Marketing at Hull.