DMP versus CDP: Which is better for your business?

Posted in Cloud for Marketing
Jennifer Killian • September 28, 2022

When it comes to capturing and managing data about your current and prospective customers, the acronyms DMP and CDP are often mistakenly used interchangeably. For those increasing digital maturity in their organisation, it can be confusing; particularly when trying to understand the shift from 3rd party to 1st party data as well.

What do the acronyms stand for? A DMP is a Data Management Platform, whereas a CDP is a Customer Data Platform, and both are designed to collect and use customer data. However, despite the often overlapping information, they are different tools that perform distinct functions in how and what they do with customer data.

Data Management Platforms (DMPs)

So, which one do you need? Or is it both? Below we highlight the differences between the two platforms and how they benefit organisations to deliver the most effective, targeted messages to their audiences.

DMPs focus on 3rd party data and were designed to optimise ad targeting. They’re a well-established tool great for acquisition marketing such as direct mail, advertising, and data exchanges. A DMP will collate and classify audience and campaign data from multiple sources via cookies.

Based on the way DMPs package data they help marketing teams better understand their audience groups and therefore deliver better ads and optimise digital campaign performance. Further, the platform is designed to reach audiences similar to the ones already identified and help grow a customer base.

However, given that DMPs play in the 3rd party data space, the information collected and stored is de-identified - it’s the same anonymous information that can be obtained and shared by many, and doesn’t specifically reflect the interests of your unique customer base.

Customer Data Platforms (CDPs)

Similarly, a CDP uses 3rd party data but distinguishes itself with the management and application of 1st party data and the personally identifiable information that DMPs can't collate. They also have a broader scope in the number of ways they can be applied. By gathering data from multiple channels, a CDP creates a highly personalised view of individual audience members, which can lend itself to very specific messaging opportunities. CDPs such as Wondaris are ideal for teams who want to leverage existing tech stacks and may not have the capacity for manual input - the ability to automate the collation and activation of data into multiple channels with simple click-through workflows reduces the time to roll out campaigns and delivers better efficiency and ROI.

Another benefit of a CDP is that by being able to collate and store such specific data (in a privacy-safe way) you are able to better nurture long-term customer engagement.

How do they compare?

A simple way to summarise is that a DMP works with customer segments, whilst a CDP drills down to a single customer view. The former is a short-term data collection exercise, whilst the latter stores its data long-term.

So do you need both? It really depends on the use case for the business, but for many organisations the answer is ‘yes’. Because a CDP can store and utilise 1st, 2nd, and 3rd party data including personal identifying information (and therefore lends itself to a wider range of applications and effective targeted campaigns), it would appear to be the clear one-stop shop for marketers. We don’t discount the use of a DMP and its place in ad network campaigns, and/or if you’re looking to reach new audiences. Its ability to complement customer data as well as identify new or unknown customers can feed into a CDP for more complete customer profiles.

The Wondaris cloud platform allows you to link all of your business and marketing data sources so you can better understand what’s driving people to your brand and how you can ensure they stay loyal to you long-term. Connect with the Wondaris team today.

Want to try Wondaris? Get in touch.

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