Customer data platforms (CDP) versus data management platforms (DMP)

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The marketing and advertising world has many acronyms. CDPs (customer data platforms) and DMPs (data management platforms) are commonly confused terms. Each of them is distinct and both the technologies play complementary roles. One doesn't necessarily replace the other. Understanding the difference between a CDP and a DMP is essential while planning your marketing and customer interaction strategy.

Key differences between a CDP and DMP

Key differences between a Customer Data Platform (CDP) and a Data Management Platform (DMP).

  • 1st party v/s 3rd party data. CDP typically manages 1st party data through the integrations that are done from various input systems. Whereas DMPs are 3rd party data sources that can be used to enhance 1st party data or used as a stand-alone source for campaigns.
  • Data sources. CDP data comes out of your current marketing systems that are verifiable and quality controlled. Whereas data within a DMP is from external sources that you can't validate. The accuracy of the data is generally subjective and varies from vendor to vendor.
  • Real-time data. CDPs provide the ability to view real-time data and act upon it based on specific events. On contrary, DMPs provide a past view of a person's attributes that cannot be acted upon in real-time scenarios.
  • Database updates. DMPs only allow scheduled database updates; CDPs are updated in real time, as soon as new information is added.
  • Data expiration. Using a CDP, you can retain old data as needed for marketing and business needs. DMP data usually has a shorter (3-month) retention period.
  • Usage of systems. DMPs are mainly used for ad targeting. The segments created within DMPs are based on the attributes and data made available from 3rd party data sources. On the other hand, there are multiple use cases for a CDP, such as customer 360-degree view, ad targeting, web personalization, data mining, etc., since 1st party data is used.
  • Personally identifiable information. DMPs typically don't provide personally identifiable information; they use anonymous digital identifiers such as cookie id, IDFAs, etc. A CDPs allow you to store and view personally identifiable information such as name, email, customer id, etc.
  • Look-alike audiences. DMPs provide the ability to create look-alike audiences who can be targeted via DMP integration with ad platforms. CDPs, on the other hand, can't create look-alike audiences by themselves and need integrations with DMPs to create look-alikes.

CDPs and DMPs are complementary. DMPs can provide enrichment to CDP data for better segmentation of users. On the other hand, CDP data used within DMP can help create better user targeting and more accurate look-alike audiences. Depending on your marketing needs, one or both of these systems can be implemented.

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