​​CDP, DMP, or Both? It All Depends on Your Marketing Goals

You wouldn’t use a screwdriver to pound in a nail, would you? Nor would you try to loosen a screw with a hammer. And yet many brands do something similar by attempting to use either a Customer Data Platform (CDP) or Data Management Platform (DMP) for a job they were not designed to do.

Moreover, just as hammers and screwdrivers come in various sizes, styles and levels of quality, so too do today’s sophisticated analytics platforms. Throw in some ambiguous, if not misleading, marketing claims, and it’s no wonder there’s so much confusion. Let’s take a moment to sort things out.

CDP vs DMPs: What’s What and Which is Which?

The primary difference between a CDP and a DMP is the level of customer identification that each provides. A CDP aggregates data about known users, while the data sifted through a traditional DMP is anonymized. The first group generally consists of existing customers who have used your product or service, or at least requested collateral, while the second is made up of tire-kickers who are in the “just looking” phase.

The implications from a marketing perspective are immediately clear. Do you have a new product offering that is in your loyal customers’ wheelhouse? Or are you trying to reach new customers for your existing product line? Or, are you looking for a prospecting and personalization engine to accomplish both?

The answer will largely drive your decision about which category of tool to use. One requires the marketing equivalent of a hammer. To do the other job right you need a marketing screwdriver.

Second Level Sorting

That’s the high-level differentiation between CDPs and DMPs. There are more nuanced differences, not just between the two basic categories but also within each category. 

Here’s a basic breakdown.

Traditional DMPs

In terms of business cases, traditional DMPs often focus on the type of business they serve, which can be broken down into two basic groups: 

1. Publishers This includes essentially any business that owns and manages digital media properties. Publishers use DMPs to package their inventory into marketable audiences and sell them directly or programmatically. They also use the analytics that DMPs offer for campaign planning, audience optimization and sales enablement by validating the presence of desirable targets consuming their content. 
2. Marketers/agencies Marketers and agencies use DMPs to learn more about their existing customers — beyond what product they are buying — and  to define new persona targets and content categories to buy. They also leverage data marketplaces available within DMPs to both refine and scale their first-party data in order to improve campaign performance and drive more customer acquisition.  

In addition to those basic differences, many DMPs are now owned by cloud-based companies (some of which are pushing CDP services over DMP). There are also “DMP lite” capabilities built into walled gardens for “free,” but they pose limited value beyond retargeting and very generic cohorts grouping — unless you want to invest heavily in the rest of the walled garden to make the tech “affordable.” So: caveat emptor. (If you’d like a more detailed look at different types of DMPs, G2 has a good summary.)

CDPs

The Customer Data Platform Institute (CDPI) lists four distinct types of CDPs:

1. Data CDPs This is basic customer data and ID capture and storage, “the minimum set of functions required to meet the definition of a CDP,” the CDPI says.
2. Analytics CDPs These begin using that basic data for analytical applications — which “always include customer segmentation and sometimes extend to machine learning, predictive modeling, revenue attribution, and journey mapping,” the CDPI says.
3. Campaign CDPs These go beyond basic segmentation to individualized targeting and “often include orchestrating customer treatments across channels,” the CDPI says.
4. Delivery CDPs These provide all of the above, combined with message delivery “through email, website, mobile apps, CRM, advertising, or several of these,” the CDPI says.

To Get the Right Answers, Ask the Right Questions

By now it should be apparent that finding just the right analytics platform to achieve your marketing goals requires more than an off-the-rack purchase. You also need good customer support — experts who will tailor a solution that meets your needs, not just try to sell you — or upsell you — something that you might not need.

As you compare platforms and interact with sales teams, ask yourself if they’re meeting these needs:

• Does their proposed solution centralize your data or just some of it for a holistic view of your customers?
• Does their proposed solution use the latest offerings in machine learning, lookalike modeling, and other innovations to help you reach beyond your existing customer base through advanced prospecting?
• Does their proposed solution work within today’s “cookieless” world?
• Does their proposed solution comply with the latest auditable privacy management tools?

Customization Is the Key to Customer Success

As a brand manager, you understand that personalization is paramount when interacting with customers, whether they’re hard-core loyalists or potential prospects. That standard also applies to the tools that you use. You need data that will not only tell you who your customers are today, but where you will find new customers tomorrow. It starts with a platform that tears down silos between marketing and advertising and enables unified data sets.

No two brands collect data in the same way — which means that no two brands face exactly the same challenges. For some, data collection itself is the primary challenge. For others, the key is to figure out how to use their trove of data for analytics and prospecting. 

There’s an old saying that to someone with a hammer, every problem looks like a nail. So unless your marketing challenges are nothing but “nails,” don’t let someone sell you a hammer. You need a versatile toolbox that includes the best suite of options that CDPs and DMPs have to offer.

Data & Customer Solutions Expert Alexandra Theriault is GM of Spherical at Lotame.

To learn more about Spherical and how we help marketers accelerate success with their CDPs, contact us today.