CDP vs DMP: Which Do You Need?

Marketers are now busier than ever, with more areas to focus on and campaigns becoming ever more sophisticated and comprehensive. This means that finding the right software to support and streamline processes wherever possible is crucial.

With data becoming the driver behind most effective strategies, the need for reliable and easy-to-use solutions is becoming more prominent.

Customer data platforms (CDP) and data management platforms (DMP) both have roles within campaigns, but which do you need?

What is a CDP?

A customer data platform (CDP) allows all customer data to be collated together and completely accessible to everyone within a company, whether they work in sales, marketing or elsewhere. This information can then be unified into customer profiles, so the data can be easily used and shared where necessary.

It allows businesses to bring together data from otherwise siloed systems, which can be used to build a consolidated customer journey map and influence real-time decisions. For marketers, this means you can get a clear idea of what the value of a customer is at any given time.

Why should I have a CDP?

Without a CDP, brands are forced to keep online, digital and sales data in their different platforms, which can lead to a loss of quality in the data, as the systems may not work efficiently together. It also makes it difficult for cross-engagement or collaboration to occur, as data sets are restricted to their siloed platforms.

A CDP enables teams to act on their data much quicker than if it was stored in a data warehouse or even with a client management system (CMS). A CMS is built with the sole focus of engaging customers using a variety of historical and general data. However, they are often incapable of dealing with large amounts of information, including when you have multiple systems to feed details from.

In contrast, a CDP is able to draw data from multiple sources and consolidate it into one place. This type of system can handle a variety of different data types without compromising the quality of it. Types of information that can be fed into a CDP may include transactional data, behavioral data, mobile data, profile data and even product information.

Having all this information in one place means marketers can get a snapshot of behavior from all points of the customer journey, while its analytical abilities mean it is much more straightforward to draw insight from the database. This not only gives teams a more rounded view of their clients, but means they are able to respond quickly to changes or new opportunities.

What is a DMP?

Data management platforms (DMPs) are often confused with CDPs, but their function is very different. Designed for mainly advertisements and retargeting with cookies, a DMP will focus on larger amounts of data rather than breaking it down into individual customer profiles. The information is mostly anonymous and automatically expires after a set period.

DMPs were designed to target and retarget advertising to anonymous users, while CDPs create a database of all your customers broken down into individual profiles and can be used for more than specifically advertising.

Why should I have a DMP?

One of the main drawbacks of a DMP is that they're unable to merge online and offline data, something which CDPs can do. However, this doesn't mean marketers should ignore DMPs.

In marketing, DMPs are predominantly used for audience targeting, as it allows professionals to direct adverts to specific demographics via online ads. However, this type of platform has many more applications that are relatively unexplored or acknowledged by many. They help to ensure end consumers get consistent experiences with a brand, and businesses can be safe in the knowledge that this can be easily maintained in the short and long term across a variety of marketing channels.

Without a DMP, communications can become fragmented depending on a number of different factors, including the level of personalization or segmentation needed to create a unified experience.

DMPs can be used to make better use of marketing budgets by making it straightforward to find the most high-value clients and how to best tailor their strategy to fit their target audience.

CDP vs DMP: Which do you need?

The truth is, you need both a CDP and DMP to conduct an effective marketing strategy. It's essential that the core functions of both of these platforms are identified and utilized to ensure that the systems can work cohesively.

DMPs give marketers the ability to spot far-reaching trends that could potentially change who your target audience is and how you design marketing to engage them, while CDPs allow you to get a strong idea of how individual customers are behaving and interacting with your brand.

In isolation, both platforms can be a useful resource to marketing teams, but ultimately, they are better used collaboratively. This will allow you to get the benefits of both CDPs and DMPs, while limiting their respective drawbacks.