Businesses are constantly looking for new ways to personalize customer engagements. However, the amount of data required to scale such personalized experiences across several touchpoints makes this goal a challenge.
New customer engagement technologies are stepping up to solve this problem. To fully leverage these platforms, you must understand the type of data they handle and their core function, hence the DMP vs CDP debate.
In this post, we’ll compare Customer Data Platform vs Data Management Platform, covering features, use cases, and top vendors.
At Coffee+Dunn, we help organizations leverage technology to achieve customer engagement goals. See how our customer engagement services can help you build connected customer experiences.
TL;DR – Customer Data Platform vs. Data Management Platform
How do CDPs and DMPs compare? Here’s a brief overview of the platforms.
| Customer Data Platform | Data Management Platform |
| A CDP unifies first-party customer data to create a “single source of truth.” | A DMP collects and segments anonymous third-party data to help you expand your advertising reach. |
| Pros | Pros |
| – You get a single, unified view of each identified customer. – Helps you personalize interactions across all channels. – The data isn’t for marketing only. It can also be activated by sales and customer service teams. |
– Helps you supercharge customer acquisition by taking control of the top-of-funnel strategy. – It’s highly scalable as you can reach several new audiences. – You have a choice of several third-party data providers, giving you more strategic flexibility. |
| Cons | Cons |
| – Reach is limited to your own data. Therefore, scaling isn’t easy. – Effectiveness depends on data quality, and you are responsible for data quality and governance. – Depending on the vendor, it may require specialized tech skills to implement effectively. |
– Data is anonymous, reducing personalization options. – It’s limited in scope — for advertising only. – Data isn’t persistent because cookies have a short lifespan. |
| Best For | Best For |
| Best for those who want to enhance engagement and experiences for existing leads and customers. | Best for those who want to acquire new customers by expanding their advertising to new audiences without losing relevance. |
What Is a Customer Data Platform (CDP)?
You likely already appreciate the value of breaking down departmental silos when you want members of your organization to work in concert.
Your customers also expect seamless, connected experiences, no matter where or how they interact with your business.
They expect you to remember their past messages, support tickets, purchases, and even the marketing materials you sent them. Yet, such data is often housed in siloed tools that don’t talk to each other.
Customer Data Platforms solve this problem. A CDP collects first-party customer data, resolves identities, and unifies the data to create a unified, comprehensive profile for each of your customers.
You’ll have a 360-degree view of each customer and create a “single source of truth” that every person and tool in your organization can plug into to deliver personalized and consistent customer experiences.
Customer Data Platform Features
Customer Data Platforms typically come with the following features:
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- Data activation features to ensure the data is accessible and usable.
- Data ingestion capabilities to collect data from various sources in real- or near real-time.
- Data quality assurance features to clean up and normalize data to ensure accuracy and consistency.
- Data intelligence features to help with segmentation, predictive analytics, and customer journeys orchestration.
- Data unification capabilities to transform the disparate data into a single, complete record, essentially creating a comprehensive customer profile.
It’s noteworthy that CDPs create persistent customer profiles that you can continually update as new data comes in.
Customer Data Platform Use Cases
The comprehensive data that Customer Data Platforms provide has extensive personalization use cases, including:
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- Personalized advertising: A CDP can connect and feed personalized data into advertising platforms, allowing you to drive personalized marketing messages that resonate with your customers.
- Personalization across all touchpoints: No matter the platform your team engages with a customer, they’ll have historical and near-real-time data to personalize the interaction.
- Customer journeys orchestration: The unified data, advanced segmentation capabilities, and the omnichannel plus real-time personalization features allow you to design and automate personalized customer experiences in real-time.
With the ability to orchestrate customer journeys, you don’t have to rely on traditional marketing campaigns that follow predefined journeys. You can automatically adapt your marketing strategy in real-time based on a customer’s behaviour and actions.
Customer Data Platform Examples
The CDP landscape is constantly evolving with new tools hitting the market every year. Here are the tools that have stood the test of time:
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- Microsoft Dynamics 365 Customer Insights
- Salesforce
- Oracle Unity
- SAP
The value of a CDP is its ability to unify data and make it available to other tools within your stack. Therefore, you’ll need robust integration capabilities.
Even better, you want a vendor that provides CDP and other services (e.g., CRMs) on one platform so the tools can interact seamlessly.
We prefer Microsoft because Dynamics 365 does this perfectly, providing next-level synergy for marketing, sales, and customer service teams.
What Is a Data Management Platform (DMP)?
Having a persistent unified profile of each customer, as is created by CDP, is valuable. However, you also need a way to handle and deploy anonymous first-, second-, and third-party data for audience segmentation, programmatic advertising, etc.
Data Management Platforms serve this very purpose. They collect and organize non-personally identifiable data to create broad, cookie-based audiences for targeted advertising.
Such audience targeting features allow you to reach potential customers with demographics or behaviors similar to those of your current customers/audience.
Data Management Platform Features
Data Management Platforms typically come with the following features:
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- Data ingestion features: DMPs collect large volumes of data from your own internal sources, partner companies, and third-party vendors.
- Audience segmentation features: Using cookies and device IDs, DMPs can segment and build audiences based on shared interests, product usage, demographics, and behaviors.
- Lookalike modeling features: Based on the profiles of your first-party data, DMPs can find new but anonymous users who share the same interests. It makes it easier to expand the reach of your advertising campaigns while keeping them relevant.
- Integration capabilities: To activate data for advertising, DMPs should be able to integrate with various ad ecosystems.
Data Management Platform Use Cases
DMPs primarily help with personalized advertising. Here’s how to use these platforms to expand your reach without sacrificing relevance.
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- Advanced audience targeting: You can effectively target anonymous online users based on past behavior. For instance, if you offer tax planning services to real estate investors, you can target those who previously looked up property cost segregation services.
- Extend your audience by modelling traits: Using your own data, you can use lookalike modelling to identify users with similar traits. It can help you target high-value customers, leading to higher conversion rates, average lifetime value, and lower churn rates.
- Suppress reach to particular audiences: Expanding on the point above, lookalike audiences also allow you to exclude similar audiences from campaigns. For instance, you can exclude people who have already bought a competing service/product to prevent wasted ad spend.
Data Management Platform Examples
The DMP space has seen some interesting mergers and acquisitions in the past. Previously notable brands are now part of larger companies’ suites.
Examples include:
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- BlueKai – now Oracle Data Cloud
- Krux – now Salesforce Audience Studio
You can also check out Adobe Audience Manager and Lotame.
Does Microsoft offer a DMP? Not in the traditional sense. Some of the capabilities you’d expect in a DMP come integrated in D365 Customer Insights, a CDP and customer engagement platform.
Detailed Comparison Between Data Management Platform and Customer Data Platform
Let’s look at the key factors that differentiate CDPs and DMPs.
| Features | Data Management Platform (DMP) | Customer Data Platform (CDP) |
| Data Type | Uses anonymous behavioural data, typically sourced from third parties. | Uses first-party identity information plus behavioral and transactional data. |
| Customer Identity Resolution | Identity isn’t resolved; instead, data is linked to cookies, device IDs, etc. | Identity is resolved to create a complete, unified customer profile. |
| Use Cases | For extending advertising reach through lookalike audiences. | For personalizing customer experiences and journeys across all touchpoints. |
| Data Ownership | A third-party provider owns the data, and you get a licence to use it for a specific campaign(s). | It’s first-party data. Therefore, you own it. |
| Scalability | Highly scalable and can handle large volumes of unstructured data from several sources. | Moderate to extensive scale, depending on how many customer profiles you have. |
| Integration Capabilities | Integrate with third-party data providers, ad exchanges, Demand-Side Platforms (DSPs), social media platforms, and various ad networks and marketing platforms. | Integrate with website and app analytics, e-commerce platforms, marketing automation platforms, point-of-sale systems, CRMs, and various personalization engines. |
Similarities and Differences
You can use a CDP or a DMP to scale personalized customer experiences. However, the two are designed for different data types and functions. Let’s explore the key similarities and differences.
Similarities Between CDP and DMP
CDPs and DMPs have the following similarities:
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- Data aggregation capabilities: You can use both to collect and aggregate data from several sources. You’ll have one hub of customer data.
- Audience segmentation capabilities: Since the goal is personalized engagements, both allow you to move from broad targeting to segments based on behavior, interests, demographics, etc.
- Focus on customer acquisition: While CDP data has organization-wide relevance, both CDPs and DMPs primarily focus on enhancing marketing and sales functions. They can help you reach your targeted audience, increase conversion/close rates, and reduce overall customer acquisition costs.
Differences Between CDP and DMP
The platforms differ in the following ways:
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- Data type: CDPs collect first-party data and you can resolve identities to create unified profiles of every customer. DMPs, however, primarily collect anonymous data based on cookies and device IDs — and mostly from data brokers.
- Data persistence: CDPs help you create a persistent record for each customer that you can update continuously as new information becomes available. For DMPs, however, the data has a short lifespan because cookies have a limited lifetime.
- Primary use case: You’ll typically use CDP data to enhance engagement with existing customers or prospects/leads already within your pipeline. DMPs are primarily used to find new relevant audiences.
CDP vs. DMP – How to Choose the Right Platform for Your Needs
On the surface, you can personalize experiences with either a CDP or DMP. However, they cater to different needs and you must define your objectives before choosing either.
A CDP will help you when you want:
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- To unify first-party data from your own website, apps, etc.
- To resolve identities to create complete customer profiles.
- To orchestrate personalized customer journeys in real-time.
- To create end-to-end customer experiences across several touchpoints.
On the other hand, a DMP is ideal when:
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- Find new lookalike audiences to scale advertising without losing relevance.
- You want to source third-party anonymous data from brokers.
That said, the platforms aren’t mutually exclusive. You can use both if your needs and budget justify it.
The Bottom Line
It’s valuable to have a CDP and a DMP in your customer engagement toolbox. However, the most powerful tool can’t help you achieve your goals if you don’t have a solid plan and implementation strategy.
The customer engagement strategy comes first. It’s for this reason that Coffee+Dunn takes a Plan > Build > Run approach to helping businesses like yours create connected customer experiences.
We can help you effectively implement CDP and marketing/advertising solutions to achieve your customer acquisition, engagement, and retention goals faster.
Schedule a free consultation with our team today to see how we align marketing, sales, and customer service to drive sustainable business growth.
Frequently Asked Questions (FAQs)
Let’s now answer some of the common questions we get about CDPs and DMPs.
How Do CRM, CDP, and DMP Differ?
A CPD creates a single, unified profile of each customer to enable personalized, connected experiences. A DMP uses anonymous data to segment audiences for targeted advertising.
A CRM is a little different, as it focuses on helping manage one-to-one interactions with existing leads and customers.
What Is the Difference: CDP vs. Data Warehouse?
The data in a CDP is primarily used for customer activation and engagement.
Data warehouses, on the other hand, store large volumes of data from nearly all internal sources for reporting, business intelligence, historical analysis, and other relevant operational and strategic uses.
How Do CDPs and DMPs Handle Cross-Device Tracking?
CDPs use personally-identifying information that a customer provides, e.g., phone number, email address, social media username, and user ID.
DMPs, on the other hand, use probabilistic matching to track profiles to a “high degree of confidence” without guaranteeing a perfect match. They typically use cookies, IP addresses, locations, and device types, etc.
What Types of Integrations Are Available for CDPs and DMPs?
CDPs integrate with website and app analytics, e-commerce platforms, marketing automation platforms, point-of-sale systems, CRMs, and various personalization engines.
DMPs integrate with third-party data providers, ad exchanges, Demand-Side Platforms (DSPs), social media platforms, and various ad networks and marketing platforms.
Which Is Better for B2B vs. B2C Businesses: CDP or DMP?
We’d say neither is inherently better than the other for B2B or B2C. You’d have to analyze your business goals and customer engagement plan to arrive at a decision.
That said, you can use both to create a comprehensive customer acquisition and engagement engine.
Looking Forward
Every business can prioritize reaching broad new audiences and enhancing engagement with existing leads/customers.
Therefore, the debate really shouldn’t be about Customer Data Platform vs. Data Management Platform, but how to use both to drive personalized customer interactions at scale.
Ultimately, the best path forward is to evaluate your business goals and use technology to design experiences that align with those objectives.
Ready to align your customer data strategy with your business goals? See how we can help you create connected experiences with our Plan > Build > Approach.
