Customer Data Platform (CDP): What Is It & How Does It Work?

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Customer data platforms (CDPs) are a game-changer when it comes to how businesses collect, manage, and use customer data. In this crash course on CDP marketing, you’ll learn everything you need to know about these platforms, how they work, and what benefits they provide.

What Is a Customer Data Platform?

A customer data platform consolidates consumer information from multiple sources, providing you with a 360-degree view of each customer. CDPs are purpose-built to collect and integrate data in real time, ensuring that you always have the most up-to-date information at your fingertips.

CDPs vs. Data Management Platforms

Data management platforms (DMPs) primarily collect and manage anonymous data. While they’re useful for targeting broad audiences, they don’t provide the level of detail you need to engage in personalized marketing. You can use them for high-level segmentation and ad targeting, but you won’t be able to speak to niche audiences.

By contrast, CDPs deal with known customer data. These platforms include personal identifiers, such as names and addresses, which you can use to create detailed consumer profiles and connect with audiences on a deeper level. 

• Learn more about CDP vs DMP.

CDPs vs. Customer Relationship Management Platforms

Customer relationship management (CRM) platforms are another common tool in the marketing tech stack. They’re designed to help you nurture and optimize relationships with consumers. While they store tons of valuable information, they often lack real-time functionality and integrations.

CDPs consolidate data from a variety of sources to inform your marketing decisions, while CRMs facilitate long-term relationship nurturing.

Customer Data Platform Benefits

A good customer data platform will provide the following advantages: 

1. Unified Customer Data

One of the biggest perks of CDPs is their ability to unify customer data from multiple sources.

A fully integrated customer data platform can bring together insights from social media interactions, website behavior, transactional data, and more. A unified view helps you understand your customer’s journey, remove barriers, and improve conversion rates. 

2. Elevated Personalization Capabilities

Delivering personalized messaging requires individualized data. Customer data platforms provide granular insights, including names, addresses, purchasing history, and more. You can use this information to target consumers with offers and messaging that appeal to their unique interests and needs.

3. Refined Customer Insights

CDPs provide deep insights into customer behavior, helping you identify patterns and trends you might not notice otherwise.

These insights enable you to make data-driven decisions and optimize your marketing strategies. You can divert resources away from less impactful marketing efforts and focus on channels that resonate with your ideal audience. 

4. Enhanced Marketing Efficiency

Customer data platforms improve marketing efficiency by consolidating all consumer information into one location. You can automate data collection and integration processes, reducing the time needed to manage customer information.

CDPs also promote better audience segmentation, ensuring that your content reaches the right people at the right time in their journeys. 

5. Strengthened Data Compliance and Security

Customer data platforms put you back in control of the information you collect. You can use the increased oversight to promote better compliance and security while protecting your customers’ confidential data.

How Do Customer Data Platforms Work?

CDPs rely on integrations to gather customer data from multiple sources, including websites, apps, social media channels, and CRMs. They consolidate first party, second party, and third party insights to create holistic customer profiles. 

Types of Data Collected

Customer data platforms collect several different kinds of information to create holistic consumer profiles. They rely on three particular types of data: first party, second party, and third party.

First Party Data

Any information you collect directly from your customers through interaction on your website, app, or social media page will be classified as first party data. For instance, a person’s email address, mailing address, and name that you gather when they create an account on your website would be considered first party data. 

Second Party Data

Second party data is information you obtain through partnerships with other businesses. For instance, let’s say you sell sports apparel and fitness clothing. You could trade customer information with a gym equipment retailer in your region.

Third Party Data

Third party data is information you purchase from an external source. Insights sourced from third parties may be less accurate, complete, or timely than other data.

Types of Customer Data Platforms

There are several different types of customer data platforms, including:

Traditional CDPs

Traditional customer data platforms collect and unify consumer insights via integrations. They provide a centralized database for your customer data. Organizing all of the info you collect in one place makes it easier to access and use. 

Composable CDPs

A composable CDP allows you to pick and choose which features and tools you need. By selecting only the features you need, you may lower your total cost while ensuring that the CDP complements the capabilities of your CRM or other data solution. As such, choosing a flexible option like composable platforms can keep expenses down as you promote integration with your existing tech stack. 

Hybrid CDPs

Hybrid customer data platforms combine various elements of composable and traditional CDPs. They provide comprehensive data integration and customizability. 

Infrastructure CDPs

Infrastructure CDPs focus on the backend infrastructure required to manage and process large volumes of data. They’re designed for companies with extensive information management needs and offer exceptional scalability. 

Marketing Clouds

Marketing clouds integrate seamlessly with other marketing tools within the cloud ecosystem. They offer unified customer data alongside a suite of other marketing applications, enabling you to formulate more cohesive strategies.

Customer Data Platform Examples

There are many different CDPs out there. Here are a few well-known options you can use to jumpstart your search:

• Segment: This platform has a reputation for being easy to use and providing lots of integrations 
• Tealium: Tealium offers powerful compliance and data privacy features
• Treasure Data: This CDP excels at handling large datasets and providing advanced analytics

Our list offers a good starting point. However, it’s important to do your homework and take advantage of free demos so you can find the solution that best aligns with your company’s marketing needs.

Finding Your Target Audience With Performance TV

Looking for a way to support your CDP marketing efforts while leveraging data from various other sources? Enter MNTN Performance TV. Our Connected TV (CTV) marketing solution empowers you to build first party audiences by uploading data from your customer data platform, CRM, or any other high-quality data source.

Furthermore, with MNTN Matched, the industry’s first keyword-based audience building tool, you can seamlessly connect with unique audiences that will actually love your brand — and convert.

MNTN Matched uses a combination of generative AI and multiple data sources to create audience segments that support your big-picture growth goals better than traditional TV audience targeting. You can filter prospects by intent, location, and numerous other criteria to build your ideal audience.

Connect with your most enthusiastic potential consumers with MNTN Matched. Demo MNTN Performance TV today to learn more. 

Customer Data Platforms: Final Thoughts 

Customer data platforms are a powerful solution for centralizing, managing, and making use of the consumer information you’re already collecting. By unifying data from multiple sources, CDPs enhance your personalization capabilities and allow you to connect with consumers in a more meaningful way.

However, they’re far from the only personalization tool at your disposal. Make it a point to leverage additional segmentation and targeting technologies, such as MNTN Matched, to create a holistic marketing strategy that drives brand growth.