Wondering about the difference between a customer data platform (CDP) and a data management platform (DMP)? A CDP makes integration of first-party data easier for DMPs to improve ad targeting, while a DMP enriches CDP data for smarter customer communication.
DMPs focus primarily on third-party data, whereas CDPs make use of all data sources, including first-party data. While CDPs focus on all marketing aspects, DMPs are designed specifically to optimize ad targeting for advertisers and agencies. But DMPs alone won’t give you a sustainable competitive advantage over your competitors.
What’s a DMP? The whole purpose of DMPs is to help marketers better understand their audiences so they can target ads more effectively. Ultimately, DMPs are in the business of packaging and repackaging data. Their audiences get more accurate over time because they collect more anonymous data as customers use DMP-generated audiences to run digital advertising. Read on to learn the benefits of a customer data platform vs DMP.
Here’s the lowdown on DMPs:
DMPs can’t store PII (Personally Identifiable Information)
For obvious reasons, since DMPs are in the business of sharing audiences.
DMPs can’t help their customers differentiate
A DMP is inherently an equalizer, not a differentiator, and while they excel at complementing your customer data (so that you can find out more about who your customers are), the same information can be retrieved by your competitor and all other customers of the same DMP.
Treasure Data Intelligent CDP is a best-in-class customer data platform and central repository where all of your first-party data, website, mobile app, analytics tool, CRM, marketing automation, advertising channel, IoT, POS, and other data is unified. We make data easily accessible from a single, reliable source of truth owned by your marketing team and available to all your business units.
CDP vs. DMP
According to the CDP Institute:
“CDPs work with both anonymous and known individuals, storing “personally identifiable information” such as names, postal addresses, email addresses, and phone numbers, while DMPs work almost exclusively with anonymous entities such as cookies, devices, and IP addresses. Indeed, anonymity is essential to the DMP’s role as a way to exchange information about audiences without violating personal privacy. What’s changed is that CDPs are integrating more often with advertising systems, and thus storing more DMP-type information such as cookie IDs with audience tags. Some DMPs are also storing personal identifiers, although these are carefully isolated from situations where anonymity is still important. But just adding personal identifiers doesn’t give a DMP the advanced identity matching and flexible data storage built into CDPs. So it will be hard for most DMPs to match full CDP functionality.”
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CDP
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DMP
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Use Cases: All of marketing: Customer relationship management. Integrates with any take action system, including adtech.
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Use Cases: Specific to advertising: Better ad targeting. Improves media buying efficiency
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Data Types: First-party data management with little third-party data.
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Data Types: Third-party data management with little (anonymized) first-party data.
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Profile Identifier: Primarily keyed on tangible customer attributes (PII)—customer ID, name, email, address etc.
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Profile Identifier: Primarily keyed on anonymous digital identifiers (non-PII)—cookie ID, IDFA, etc.
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Data Retention: Typically long retention periods to enable analytics over customer lifetime.
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Data Retention: Relatively short retention periods because primary use cases are ad targeting.
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5 reasons to choose a CDP vs DMP
1. Storing first-party data, including PII
Use case: Customer identity matching
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CDP
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DMP
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Stores all first- second- and third-party data, including anonymous and PII data (such as individual customer names, postal addresses, emails, and phone numbers). CDPs are integrated with advertising systems, and can store DMP-type information such as cookie IDs with audience tags.
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DMPs cannot accept first-party data and work almost exclusively with anonymous information such as cookies, devices, and IP addresses. Anonymity is essential to the DMP’s role as a way to exchange information about audiences without violating personal privacy. Some DMPs are also storing personal identifiers—but simply adding personal identifiers doesn’t give a DMP the advanced identity matching built into CDPs.
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2. Single, unified data storage
Use case: Flexible, fast querying
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CDP
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DMP
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Stores all first- second- and third-party data, including anonymous and PII data (such as individual customer names, postal addresses, emails, and phone numbers). CDPs are integrated with advertising systems, and can store DMP-type information such as cookie IDs with audience tags.
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DMPs cannot accept first-party data and work almost exclusively with anonymous information such as cookies, devices, and IP addresses. Anonymity is essential to the DMP’s role as a way to exchange information about audiences without violating personal privacy. Some DMPs are also storing personal identifiers—but simply adding personal identifiers doesn’t give a DMP the advanced identity matching built into CDPs.
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3. Raw, detailed data with unlimited storage capacity
Use case: In-depth, rich analysis
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CDP
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DMP
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CDP captures raw data with granular-level detail, and stores this historical information with unlimited capacity. Data is also collected for persistent, long-term storage and multiple data formats are supported, without predefined taxonomies.
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DMPs collect data like common transactional marketing tools—with tags, APIs, and uploads. The resulting view is often high-level and in aggregate. As such, most DMPs and transactional tools only retain user information for less than 90 days.
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4. Applications in the entire martech stack
Use case: Usage beyond advertising
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CDP
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DMP
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CDPs can take any data and get it wherever it needs to get—regardless of where in the customer life cycle (or marketing org) the other systems live. They can syndicate data to any kind of partner on either side of the known/anonymous equation—adtech or martech. That can mean passing segments of rich first-party data onto Facebook for look-alike modeling or more effective retargeting and other steps in the customer journey.
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DMPs were designed to build targets for advertising and acquisition marketing, or dealing with new and unknown customers. They can be thought of as a cookie-pool with pre-built anonymous audiences to enhance display ad targeting. DMPs can’t help their customers differentiate: a DMP is inherently an equalizer, not a differentiator, and while they are excellent at complementing your customer data (so that you can find out more about who those customers are), the same information can be retrieved by your competitor who happens to be the DMP’s customer.
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5. Complete customer profile
Use case: Personalized customer experience
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CDP
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DMP
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CDPs allows you to have all the information about a person—historical, contextual, demographic, behavioral, etc.—on hand to inform the communication and brand interaction on a personalized basis. The persistence of the customer’s individual profile across all channels and sessions reveals a wealth of new traits and opportunities for personalization.
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DMP user profiles are basically a list of users and an associated list of which predefined categories/subcategories they belong to. DMP builds a temporary profile based on demographic information, anonymous cookie IDs, and packaged and repackaged data from one customer to another. They cannot de-anonymize because of legal limitations related to sharing third-party data and do not build a persistent user profile or help to resolve from an anonymous user to a known identity. Also, DMP decision-making is often hidden inside a “black box” of predefined rules. Their audiences get more accurate over time.
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