CDP vs. DMP — learn which is right for your company
Collecting and analyzing data is crucial to understanding customers. To create meaningful experiences that scale, you need to harness data to target specific groups within your audience.
Customer data platforms (CDPs) and data management platforms (DMPs) pave the way to engaging with your audience better. Both platforms gather data and audience insights, so companies often confuse the two.
To help you understand the strengths of each solution, we’ve created this comparison guide. While a single platform may fit your business better, it’s not always a question of one or the other. Some companies should consider leveraging both tools based on their audience and data needs.
In this guide, you’ll learn about the main differences between CDPs and DMPs. We’ll go over how each platform handles various data types, organizes user profiles, and retains information, providing real-world examples of the tools in action.
We’ll be covering these topics related to CDPs and DMPs:
- Their differences
- Data types in each
- Profile identifiers in each
- Data retention in each
- CDP in action
- DMP in action
- Frequently asked questions
- Start your journey
CDPs vs. DMPs
A customer data platform unifies data across channels by collecting information that can connect to individual users. Marketers often use CDP data to build customer profiles and assess how to personalize experiences based on known and unknown customer behaviors.
In general, CDPs:
- Use first-party data (information collected directly from your customers) with some second-party data (information shared by a partner, advertiser, or other company)
- Store personally identifiable information (PII) tied to individual users
- Retain long-term data
- Involve a low risk of violating privacy regulations
A data management platform consolidates large datasets from various sources by gathering information that can’t identify specific people. DMP data helps marketers understand how unknown users interact with their brand and provides insights into how to convert customers.
Since DMPs deal with information related to unidentified prospects, marketers use this platform to focus on creating advertising campaigns and reaching a larger audience.
- Manage third-party data (information purchased from other organizations or data-collection companies), with some second-party data
- Collect pseudonymous data at a large scale
- Store data for shorter periods
- Involve a higher risk of violating privacy regulations
While CDPs and DMPs perform almost the same function at first glance, they prioritize different data types, customer identities, and retention strategies. Marketers should select a platform based on their company’s primary data sources, typical customer behaviors, and strategic marketing or advertising goals.
Although marketers can use one platform, they often combine CDPs with DMPs to unite the advantages of both tools and address different data needs.
CDPs vs. DMPs — data types
Now that you have a basic understanding of CDPs and DMPs, let’s look more closely at how each platform helps you organize first-, second-, and third-party data.
First things first. Details that customers share with you directly — such as contact information or survey responses — are called first-party data. This information is the highest quality data and is invaluable to understanding customers.
Marketers can easily trace first-party data back to users who generally provide reliable information of their own free will. Cutting straight to the source prevents misleading information and is less likely to bring up privacy concerns.
CDPs mainly use first-party data to build user profiles, which store and update customers’ traits, interactions, and behaviors in real time. Some DMPs can ingest first-party data, but in general, these tools are better suited to managing third-party data.
Second-party data is first-party data that you buy or obtain from another organization. While getting information from another company will help expand your reach and provide new insights, you’ll need to keep a few drawbacks in mind.
Although partners or advertisers collect this information directly from customers, they can’t always guarantee accuracy. For this reason, you assume a greater risk of violating privacy regulations or working with faulty information.
CDPs and DMPs both handle second-party data. DMPs often have data exchange features to simplify the sharing and selling process between companies. CDPs facilitate sharing data between other tools, such as customer relationship management (CRM) software.
Finally, third-party data is data gathered and sold by companies that don’t directly connect with the data sources.
Although getting information from a data collection company can broaden your access to anonymized data, third-party data is less valuable because anyone can purchase it. Competitors might use the same information, so it won’t necessarily give you a better advantage. This data type also is inherently riskier since data collection companies can’t ensure all the data meet privacy standards.
DMPs primarily use third-party data to generate insights about unfamiliar audiences and build targeted advertising campaigns. Some CDPs use third-party data, but it’s more common for marketers to focus on first- and second-party data with CDPs.
CDPs vs. DMPs — profile identifiers
As you think about which data types your company manages, you should also consider how CDPs and DMPs organize and categorize users.
CDPs and personally identifiable information
If you need to zoom in and look at data for individual users, CDPs have your back. This platform collects personally identifiable information (PII), or data that directly or indirectly identifies individuals. PII can include specific customer attributes like names, emails, and phone numbers or general descriptive identifiers like gender, race, and geographic region.
This raw data at the granular level is key to improving all aspects of your marketing strategy, helping inform specific brand interactions on a personalized basis.
CDPs allow marketers to store and organize PII in ethical ways to create customer profiles and segments. These insights can lead to customizing experiences at scale better and increasing audience engagement.
DMP profile identifiers
DMPs collect information at a larger level. Instead of using PII to differentiate users, DMPs generalize groups by working with anonymous and pseudonymous elements like cookies, IP addresses, and devices.
Unlike CDPs, which develop specific user profiles, DMPs sort through large swaths of data to create audience-based personas and segments.
While CDP data lends itself to a wider variety of areas within marketing, DMP profile identifiers apply best to building audiences through advertising.
CDPs vs. DMPs — data retention
The final factor you need to weigh when selecting CDPs or DMPs is data retention. Depending on your company’s goals and audience, you may need a short-term or long-term strategy.
CDPs offer flexible data storage for those who need medium- to long-term data storage. Marketers can grow and refine customer profiles over months to years.
Most people choose CDPs with the end game in mind, gathering data to get the most accurate picture of their audiences over time. This long-term approach builds rich profiles that empower marketers to tailor their marketing plans to specific kinds of users.
On the other hand, DMPs shine when it comes to short stretches. Since advertising focuses on creating a sense of urgency, DMPs store data for smaller intervals — often around 90 days.
This system helps describe current audience trends, allowing marketers to create ads to attract interested customers now rather than later. These campaigns prioritize inspiring immediate action rather than sustaining engagement.
CDP in action
Dick’s Sporting Goods, America’s largest sporting goods retailer, integrated a CDP to personalize the customer experience and expand its loyalty program ScoreCard, which now boasts more than 20 million members.
Dick’s uses Adobe Real-Time Customer Data Platform to gather insights about customer interactions across channels and update its marketing playbook in action. The retailer uses profiles and segments to customize the buyers’ journey based on their favorite sports and products and provides personalized perks to ScoreCard members.
This CDP personalization strategy brought millions of customers to the finish line during the pandemic and keeps shoppers satisfied at scale today.
DMP in action
Princess Cruises, the third largest cruise line in the world, deployed a DMP in its advertising strategy to understand guest preferences and encourage more people to explore new destinations through cruises.
The cruise line uses Adobe Audience Manager to develop audience segments based on information from booking data, CRM databases, and even staff notes. These insights about which groups take cruises and popular activities, experiences, and services help Princess Cruises to target high-value prospects and streamline campaigns.
After managing advertising with a DMP, Princess Cruises saved 65% on the cost per landing page across properties and increased identifiable audiences by 300%.
Frequently asked questions
Selecting a platform to organize customer data doesn’t have to be complicated. Learn the answers to a few common questions about CDPs and DMPs below.
What are the main differences between a CDP and a DMP?
While both platforms manage data to help marketers understand and organize their audiences, CDPs and DMPs involve different data types, user identifiers, and retention methods.
CDPs focus on first- and second-party data that trace back to individual users, while DMPs deal with second- and third-party data describing larger groups. CDPs collect PII, while DMPs use general identifiers like cookies, IP addresses, and devices.
DMPs store data for shorter periods of time, often around 90 days, while CDPs are designed to store data for years.
Since DMPs are geared toward understanding how to encourage immediate engagement, they are ideal for creating targeted advertising campaigns. CDP data applies to broad marketing objectives like expanding personalization at scale.
Why should businesses use CDPs or DMPs?
CDPs and DMPs open the door to understanding your audience better and saving significant time, energy, and money on marketing and advertising. As the digital world becomes increasingly personalized and fast paced, it’s vital to update your tech stack so that you can understand your evolving customer base and plan for growth.
What does the future hold?
CDPs are expected to become more and more important because of the global theme of consumer privacy. New regulations are coming into effect to protect consumer data and give consumers more control over their own data. Emerging data governance rules are being created to ensure that consumers have rights about how their data gets collected and used, and companies are taking steps to require consent from end users for the use of their advertising identifiers and other data.
It’s also anticipated that third-party cookies — the way that a lot of advertising and personalization happens on the web today — could be done away with in the near future. Another expectation is the convergence of CDP and DMP capabilities to fulfill a complete set of use cases across the customer lifecycle, all in just a single system.
Start your journey
If you’re looking for a solution to inform wider marketing goals and illustrate specific customer profiles, we recommend choosing a CDP. A DMP will be an ideal fit if you want to understand your general audience and expand reach and revenue through advertising.
Remember that it’s not always an either-or question. Many companies choose to take advantage of both tools so they can more effectively understand and target audiences.
CDPs and DMPs can take your marketing strategy to the next level. These platforms unify data across multiple sources to help you understand your audience and create meaningful, relevant experiences that scale.
To learn whether Adobe Real-Time Customer Data Platform could be a good fit for your company, read more about its full features and benefits. If you’re looking to add a DMP to your tech ecosystem, watch this two-minute overview to learn more about Adobe Audience Manager.
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