CDP vs DMP: Choose the Right Data Platform for Your Business Needs

CDP vs DMP: How are these two marketing technology solutions different from each other?

In this blog, we will explore the two types of platforms —  CDPs vs. DMPs — that are helping marketers make more informed decisions. Customer data platform (CDPs) and data management platforms (DMPs) are essential components of a data-driven marketing tech stack.

Each solution provides tools for marketers, sales, IT and support departments on how to effectively target different audience segments to deploy better customer experiences that generate positive customer engagement. Understanding CDP vs. DMP, what each platform offers and how it empowers all of your teams within your organization is essential during the evaluation process.

As a potential customer engages with your product and services across multiple channels, devices and geolocations, they expect a personalized and seamless cx across all touchpoints. For brands to deliver on this expectation of a unified customer experience, they need the correct management systems in place to generate customer-centric strategies and deploy them to make the customer’s journey simple.

For a marketer to be successful, they need a marketing technology stack that allows them to easily access and organize their customers’ first–party data and behaviors in one central location. This enables marketers to quickly and efficiently deliver a positive interaction to new and existing customers via CDP marketing automation.

Customer Data Platforms (CDPs)

Customer data platforms recently entered the scene. They’re now predicted to be the No. 1 solution to help collect and unify customer data to generate insights from all offline and online sources. This includes historical, contextual, demographic and behavioral information to provide customer insights.

A smarthub CDP (AKA CX Hub) is used for creating personalized customer experiences by collecting and tying together customer data through personally identifiable information (PII), such as email addresses and phone numbers, to create a customer 360 (a 360-degree user profile). Unified CDP data is imperative for everything from improving audience segmentation to driving intelligent and personalized experiences via AI predictions.

Marketing, sales and support teams that utilize a CX Hub are able to leverage first-party data to deliver hypersegmentation functionalities and hyper-personalized experiences across multiple channels through customer insights and a customer 360 solution.

Customer data platform systems do this by:

1. Collecting customer identities and real-time interaction data from all first- and third-party data sources (through prebuilt data connectors)
2. Stitching them multiple sources together and removing duplicates to form a single, persistent history for each customer to create an accurate customer profile
3. Empowering marketers and other business professionals through a single customer view and user-friendly interface to gain individualized customer insight by analyzing each customer or segment audience and predicting the next best actions to foster customer relationships and purchasing
4. Enabling automated orchestration of 1:1 personalized campaign journeys across all marketing efforts, customer experiences and commerce channels, including test design and measurement

Data Management Platforms (DMPs)

Data management platforms, often leveraged by digital marketing agencies and/or in-house marketing teams, are used to identify anonymous data and audience segments by demographic, customer behavior or location in order to improve digital advertising campaigns.

DMPs aggregate high volumes of anonymous identifiers originating from multiple online sources online. The primary source for DMPs is third-party data. DMPs must work with unknown entities like cookies, devices and IP addresses to exchange information about audiences while protecting personal data security and privacy.

DMPs do not provide a sustainable competitive advantage. Instead, they help digital marketers better understand and target audiences for their marketing strategy. However, with the deprecation of third-party cookies, DMPs are becoming obsolete.

As you can see, these two systems are distinct in their use cases, users and the data they collect. A few things that you should consider before deciding whether to implement a CDP vs. DMP into your martech stack are:

1. Is your customer data siloed and how are your marketing, sales and support teams able to share and access this data?
2. What type of user data do you currently have access to and where is it being stored?
3. Is your customer data — particularly PII — secured?
4. Are you focusing on personalizing individual experiences or targeting an audience for digital marketing campaigns?

Answering these questions will help you determine whether a CDP vs. DMP is suitable for your business needs.

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