CDP vs DMP: Differences & Similarities Explained

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You need a wealth of information about your target audience to market to and engage with them effectively. However, simply gathering lots of consumer data is not enough. You also need a solution to manage the insights you collect. The key players in this space are customer data platforms (CDPs) and data management platforms (DMPs). 

In this customer data platform vs. data management platform comparison, you’ll learn the advantages and disadvantages of each option.

What Is a Customer Data Platform?

A customer data platform collects, integrates, and manages consumer information from various sources to create a unified customer profile. It provides a big-picture view of each customer, enabling you to engage in personalized marketing efforts. 

How Do CDPs Work?

Customer data platforms gather information from multiple channels via a series of integrations. You can collect and upload data to your CDP from:

• Websites
• Mobile apps
• Email campaigns
• Social media

After you’ve gathered the data, it must be cleaned, processed, and unified into a single customer profile. The platform will continuously update each profile with real-time data. Every time someone interacts with your brand or one of its digital assets, you will gain a new piece of information to add to their profile. 

Advantages of CDPs

Customer data platforms are ideal for engaging in personalized marketing campaigns. 

CDPs continuously add new data to each customer profile, helping you maintain a complete dataset for each person in your database. Keeping contact information, preferences, and other details up to date makes it easier to stay connected with customers. 

Personalized interactions and steady communication can enhance customer satisfaction. After all, 71% of customers prefer customized communication. Message personalization may increase the odds that an individual responds to your content.  

Disadvantages of CDPs

The biggest drawback of CDPs is their complexity. They are expensive to implement and maintain. Integrating multiple data sources — and ensuring that all of that information is accurate — can also be challenging. 

Furthermore, managing large volumes of customer information creates privacy and security concerns. Once you start collecting consumer data, you are responsible for protecting it and preventing it from falling into the wrong hands. 

What Is a Data Management Platform? 

A data management platform (DMP) gathers, organizes, and leverages large volumes of information from various sources to be used for digital marketing purposes. DMPs can handle both first party data and third party data. This makes them useful if you want to supplement the information you collect with outside insights. 

How Do DMPs Work?

A data management platform aggregates information from various sources. It collects data from many of the same sources as CDPs while also integrating insights and anonymized data from third party providers. 

A DMP will segment and categorize data based on various criteria, including behaviors, interests, and demographics. You can use the information to create audience segments and guide your targeted advertising campaigns. 

Advantages of DMPs

Data management platforms can handle huge volumes of data from various sources. By aggregating your data, you make it easier to digest and use. Top DMPs also feature segmentation capabilities, which can support precise targeting efforts. 

Integration with third party data providers enhances the quality and thoroughness of your database.

Disadvantages of DMPs

Data management platforms typically retain information for only a short period. They may also leave you heavily reliant on third party data, which can potentially drive up the costs of acquiring customer insights.

DMPs focus heavily on anonymous data. This makes it more challenging to engage in personalized marketing. 

Summary of Key Differences

The CDP vs. DMP debate boils down to a few critical differences, including the following: 

Data Sources and Types

Customer data platforms primarily focus on specific first party data that you gather directly from your audience. You can collect information from purchase history, website interactions, customer feedback, and a variety of other touchpoints. Since you’re collecting the information directly, you’ll have richer insights about consumer preferences and behavior. 

Data management platforms aggregate both first and third party data. Third party data is typically anonymous and may have already been aggregated from several different sources. While you will have access to broader audience segments and a larger amount of data, the information will be less detailed. 

Think of DMPs as a tool suited for casting a wide net. If you need to engage with a huge segment of consumers and aren’t overly concerned about building heavily personalized profiles, consider a DMP. Conversely, a CDP may be the better fit if you need to target high-intent consumers with precision. 

Data Utilization

Customer data platforms excel in creating unified customer profiles for personalized marketing efforts. They enable you to segment your audience and launch targeted campaigns based on comprehensive customer data. 

DMPs are designed for audience segmentation and targeted advertising across multiple platforms. They are particularly useful for programmatic advertising and reaching broader segments where user-specific insights aren’t required. 

Data Retention and Privacy

Customer data platforms retain data for an extended period, allowing for long-term analysis and insights. You will own and control the data, which ensures you can keep it private and secure. Owning the rights to the data you collect also promotes more effective analytics processes, as you can create historical records and understand changes in consumer preferences over time.

Data management platforms often have shorter data retention periods. These solutions focus on recent information for timely advertising campaigns. The reliance on third party data can pose privacy challenges. Make sure you are sourcing your information from reputable companies that follow the latest data protection regulations and consumer protection laws. 

Finding Your Target Audience With Performance TV

MNTN Performance TV combines the best elements of CDPs and DMPs to create a unique targeting solution. You’ll be able to build first party audiences within our CTV advertising platform by uploading user information and other insights from your CRM database. 

Alternatively, you can create audiences directly within our platform using MNTN Matched. This innovative software taps into several data sources and uses generative artificial intelligence (AI) to create audience segments based on their levels of intent. Once these audiences have been generated, you can use these insights to inform optimizations with MNTN and across your other marketing channels.

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After you’ve built your ideal audience, you can target them with quality content by tapping into MNTN’s premium CTV inventory. Our partnerships with top streaming providers serve your content alongside premium shows and movies to the consumers most likely to engage with your brand. 

Build custom audiences and connect with your ideal customers using MNTN Performance TV. Schedule a demo today. 

CDP vs. DMP: Final Thoughts 

Both CDPs and DMPs can play an important role in your targeted marketing strategies. Customer data platforms are ideal for businesses looking to enhance the customer experience through personalized marketing. DMPs are essential for targeted ad campaigns, using both first party and third party data to reach broader audiences. 

Before choosing between CDPs and DMPs, consider your business goals and marketing needs. Alternatively, you can leverage a hybrid solution such as MNTN Matched. Our dynamic platform taps into the benefits of both CDPs and DMPs to elevate your targeting capabilities and maximize the reach of your next OTT advertising campaign.