What is the difference between CDP and DMP?
Having personalization as one of their main functions, users can find data management platforms (DMP) and customer data platforms (CDP) quite confusing.
DMPs were originally created for advertising use cases, where the focus is always on audience management via their device IDs, IP addresses and cookies that are created from their buying engagements. In contrast, CDPs consolidate and store personally identifiable data of users, like name, email addresses, postal addresses, mobile numbers.
Therefore, both have similarities as they both influence customer buying behavior, but their functionalities are distinct enough to even make them strong allies. Here are some key differences between the two, that business leaders must recognize.
Chief function of a DMP is to serve advertisements. It is designed to enable cookies retargeting and lays emphasis on anonymous segments and categories. DMPs give marketers, who are striving for maximum ROI from campaigns and optimized conversion, scalable insights via failproof data mining. Marketers use DMPs for:
Audience Extension— Using recognized prospects and customer attributes as a means for better identification and prospect targeting.
- IdentiAd targeting— To extend and generate audiences for ad campaigns, including multichannel retargeting.
- Personalization— To facilitate the creation as well as implementation of enhanced, more personalized messaging across marketing channels.
- Ad-measurement— To report and figure out results, and offer appropriate campaign outcome data.
- Customer Insights— Gather smarter insights about customers via data enrichment and indexing.
- Exporting segmented customer lists for deriving business intelligence or executing campaigns
- Channel Integration— Improve the prospect’s experience across various channels by offering a standard set of audience attributes and insights.
The main functions of CDPs are to collect, organize, consolidate, as well as offer customer data for advanced execution by a variety of personalization mechanisms or marketing techniques. CDPs are aimed at complete customer lifecycle and are therefore much more flexible than DMPs when it comes to the number of applications they can be implemented on. They are used by companies in a variety of ways like:
- Recognizing and categorizing customer conduct, actions, and attributes throughout your offline and online systems.
- Describing the profiles of customers and their management for use in the future.
- Analyzing customer behavior for enhanced segmentation.
- Examining customers’ purchase history and engagement habits for further recommendations relating to eCommerce or content.
- Data management, that comprises of cleansing, validation, and integration
- Predictive analysis to evaluate customers’future actions.
- Exporting segmented records of customers for unearthing business insights or carrying out campaigns.
All in all, DMPs have principally to do with managing segments of customers with anonymous profiles. They help marketers to store data centrally like cookie IDs, apart from enabling them with programmatic ad buying.
On the other hand, CDPs have to do with managing individual customers having a unique profile. They can work with known individual data as well as anonymous data. Their built-in unification algorithms combine user data into merged customer profiles that remain persistent with time.