Identifying the right fit: a comprehensive guide to deciding between CDP and DMP systems

As marketers scramble to maximize their use of data, software systems have emerged to lighten the load and boost success. However, not all tools are created equally, so it’s important that you know which system to implement.

There are numerous tools, but I’ll use this article to break down two systems in head-to-head fashion: the data management platform (DMP) versus the customer data platform (CDP).

What is a CDP?

A CDP, or customer data platform, is a software system designed to streamline marketing processes through the use of superior data analysis and personalized data. The most common thing marketers refer to with CDP is its helpfulness in analyzing data and building better customer profiles.

In terms of giving businesses a boost, CDPs help numerous departments by removing data silos and sending the right information to the right places. It also removes the guesswork that marketers previously had to do before in-depth customer data analysis.

What is a DMP?

A DMP, or data management platform, is a software system that specializes in collecting data from all types of sources, then managing the information within. DMPs give organizations the chance to narrow their audience focuses, boosting ad campaign success overall.

When it comes to helping organizations, DMPs sort data efficiently and deliver it to the correct places, all while creating better understandings on how to market to specific audiences. This in turn saves a lot of time and money.

With the definitions of both DMP and CDP in mind, let’s further explore how they differ and what this means for you.

What are the key differences?

Because the two are easy to confuse, let me begin by clarifying this and making it simple to understand right away: DMPs and CDPs both collect and manage data, but a CDP uses this data in a more personalized way. As long as you can remember that, the difference is quite understandable.

The first difference to point out is the way the programs interpret data. A DMP feeds large amounts of data to the correct departments and divides it based on helping marketers connect with the right audience. A CDP does this as well, but in a more personalized manner. Instead of creating large groups of potential and current customers to market to, it narrows it further and more accurately. This gives marketers a much more concerted system.

The next difference comes in the storing of the data. Because a DMP acts as a sweeping net, scooping up as much data as possible for large scale marketing projects, it disregards specific personal information. A CDP, on the other hand, focuses on letting marketers create single-person customer profiles, so it stores informative data like names and emails.

In terms of marketing campaigns, the DMP is optimized for advertisements across different markets. The CDP is more for content that will reach individuals based on their interest. In this regard, think of DMP like a ‘guest’ Netflix account, and CDP like your own account. One might offer suggestions, but they won’t fit your needs the way a CDP does.

Using these differences, it becomes a lot clearer which system will benefit you, based on your current needs.

Which one best suits you?

You understand now how both a customer data platform and a dmp function, as well as the main differences between them. Next it’s time to figure out which one is best for your organization?

The good thing is, the differences are pretty cut and dry. As a result, your decision is easy. Once you identify your needs, the rest falls into place.

DMP

Let’s consider what would drive you to a DMP. First, you would be most interested in managing data in a way that gave you a chance to release content en masse to a wide but specific audience.

You would also be content with a system which locates new customers based on the traits and characteristics of previous customers. The key thing to consider then is accuracy and quality over quantity. If you want to reach more people with acceptable advertisements, a DMP will do the trick.

CDP

A lot of times, people assume a customer data platform is for smaller businesses, while DMP is for large enterprises. On the surface, the logic behind this assumption is reasonable, because a CDP has a much more personalized process. This makes it better for serving niche groups and individuals the content they want, but it doesn’t exclude a larger organization from needing a CDP.

Conversely to the DMP principles, think of CDP like the system of quality over quantity. The data is used so specifically in a CDP to create customer profiles of individual people and truly understanding their needs. This pushes marketing teams to create better content, as well as boost relationships with customers.

Final thoughts

It’s all too easy to rely on a software system to handle data, especially when we have so much data to manage. Remember though that organizations design popular tools with your needs in mind.

Make sure that whichever system you choose, it fits your particular needs. Finally, check out our similar breakdown between the CDP and CRM.