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Can CDPs and DMPs work together?

Do you need a CDP or a DMP? For some, the answer may be both.

When we talk about Customer Data Platforms (CDPs) and Data Management Platforms (DMPs), the conversation often turns into an either-or battle. Do you need a DMP? No, you need a CDP! Can a CDP help with use case X? No, you need a DMP!

But here’s the thing: CDPs and DMPs are two very different tools that do very different things. So the truth is that the either-or discussion is too limited. Because sometimes you only need one technology to meet your business goals—but sometimes the two can work together.

How do you know what you need? Start with use cases.

In a recent panel about building a MarTech super stack, tech industry leaders from Google, Salesforce, Lytics, and Adobe honed in on one key piece of advice:

Start with strategy before tech.

Technology, as they say, is a means to an end. Without the strategy and use cases in hand, it’s impossible to know which platform is better going to serve your business.

So when it comes to making the decision between CDPs, DMPs, or an approach that incorporates both, the starting point is your use cases.

What do you want to accomplish in your business? What business goals are you trying to move the needle for? Are you focused on growing your audience and getting new prospects to your site? Are you trying to personalize 1:1 for your existing customers and drive up upsell and cross-sell revenues? Are you focused on engagement? Increased customer lifetime value? Dropping cost per acquisition?

Before you start researching data platforms, dig deep into the reasons you need one. Once you’ve honed in on those reasons, it’ll be much simpler to understand which platform supports which use cases.

What CDPs are best at

CDPs use first-party data to help you understand, connect with, and better sell to prospects and customers who are interacting with your brand. They collect and centralize data so that you can better match your content, offers, and campaigns to the right audiences at the right time.

With a best-in-breed CDP like Lytics, this means:

:: Centralizing and unifying the customer data your business collects across channels and devices.

:: Helping you identify and target the right customers (most engaged, about to churn, shopping cart abandoners, etc.) based on their behaviors.

:: Making that data actionable through segmentation and suppression.

:: Personalizing content and unifying your marketing efforts across channels.

:: Helping you comply with data privacy laws.

:: Setting you up for 1:1 personalization.

So, if your use cases are about personalization, reducing churn, increasing engagement with current customers and prospects, or anything else related to customers and prospects who are already interacting with your brand in some way, a CDP is the way to go.

What DMPs are best at

Now, how does a DMP differ? DMPs focus on third-party data and are designed to help you advertise across the web.

If your primary goal is to attract new customers who’ve never heard of you or interacted with your brand before, a DMP is the tool to research.

It’s important to understand that DMP data is very different from CDP data. CDP data is robust and collected directly from your users with their consent. DMP data, on the other hand, is purchased from third-party sites and anonymized. You’re targeting people you don’t know, and the information on their interests and behaviors is less likely to be accurate.

This doesn’t matter as much when you’re running huge campaigns to try and bring in new prospects. But once those prospects get to your site, if all you have is that anonymized data, you’re likely going to miss opportunities to engage them based on their ongoing behavior with your brand.

Which is why when you get a DMP and run ad campaigns off site, we also recommend implementing a CDP.

CDP and DMP working together

Because a DMP might be good at getting new users to your site, but what do you do with all those users when they get there? How will you know what campaigns resonate with them? How will you determine who’s most likely to buy and what content is most likely to get them to buy? How will you keep them from churning and encourage them when they engage?

The answer is that with a CDP, you can't. When you're using a DMP to drive in new users, you'll need a CDP to connect with them when they arrive.

This CDP and DMP combo approach is one that's worked well for some Lytics clients, including The Economist. They use a DMP to advertise off site and they use Lytics to understand prospects and customers once they start to interact with the brand. This has led to some major success stories with both technologies.

A CDP can improve the accuracy of a DMP

Another reason DMP and CDP work well together? Because CDPs can improve the accuracy of DMPs.

You see, the proprietary, real-time data of a CDP is much more accurate than the anonymized, third-party data of a DMP. When you use that more accurate CDP data to identify an audience of your best customers and export it into your DMP, you can hone in on lookalike audiences that match your best customers and find prospects more likely to convert.

You don’t need a DMP for Facebook or Google ads

Finally, it’s worth noting that if your main ad channels are Facebook and Google, you don’t need a DMP at all. These data giants have their own proprietary targeting tools that you can use to target new audiences (or lookalike audiences).

Want to talk CDPs with the experts?

Here at Lytics, we’re pretty passionate about all things data. Download our white paper on CDPs and DMPs for a deeper dive into how they can work together and what they each do best, or reach out today to schedule a demo or a chat. We’d love to talk CDPs, DMPs, and your business use cases anytime.