Customer data platforms (CDP), and data management platforms (DMP) are easily confused. Some think they are the same; others think they are mutually excluded. The difference is more subtle as they both use data to build customer profiles. What separates them foremost is the kind of data being used and the way these platforms are being integrated into an ecosystem of apps.
One uses a customer data platform (CDP) to collect, unify and organise customer data from your website, mobile or SaaS app, or any other app where a user interacts with your business. As such, the source data of a CDP are user events such as page views, button clicks, feature triggers, etc.. which holds event data, proper to the type of event. (One typical type of event sets a field directly...but that’s an exception on the rule). A CDP will typically transform these events into either other events, or actionable customer fields (or properties), that are shared with the other tools in your stack.
In contrast, a data management platform (DMP), is a platform that collects and manages customer fields such as first name, shoe-size, MRR, etc... DMPs get their data by...well...CDPs...or by purchasing it from 3rd party data sellers, and is most often used to centrally hold large number of complete customer data on which data analysis and business intelligence can be derived. The outcome of these analyses can be used to create audiences to feed marketing automations.
Whether you should use a DMP or CDP depends on what you want to do with the data, how you plan to retain it, and if customer identity resolution has been done or not. If the data you collect are cross-app unrelated, you need a CDP to start unifying that data into one single customer profile.
Customer identity resolution through personal identifiable information
The biggest difference between customer data platforms and data management platforms are customer identity resolution, or how to unify datasets around personal identifiable information (PII).
Generally, a PII is data that allows you to identify a specific person. It could be an email, a name aggregation , a social security number, a phone number, etc... A CDP is to collect as much information as possible on every person, even before being identified and is to unify this data into one single customer profile with a set of events that represents the customer journey. The more information you collect, the more useful it becomes, because the more complete your customer journey will be to derive customer properties from.
The key to collecting this PII is to work with a CDP that ensures you're collecting PII in an ethical way. Good CDPs have very strong data security and will help you be compliant with privacy regulations by e.g. giving you the ability to delete visitor data if a user asks for it.
CDPs and DMPs also differ by the amount the time they retain data.
CDPs retain data for longer periods because they become more useful when they have more data — see data enrichtment. The additional and enriched data allows CDP users to make their marketing automations more personal to their customers.
DMPs are best when they only retain data for a short time. If you're an advertiser looking to target people interested in travel, you don't want to target someone who was interested in travel five years ago. You want to target people who are interested in travel right now or have been interested in the past 90 days, at most.
When to use a CDP and/or DMP?
CDPs are built for collecting, unifying, and dispensing 1st-party data. If you plan to create hyper-personalised marketing campaigns based on your own data, use a CDP. A CDP will gather website data, unify it with feature data form an app, and send the unified and enriched result to any number of different ecosystem tools.
Using 3rd-party data, a DMP are best used for building marketing campaigns for audiences that are unfamiliar with you. They can give you access to audiences that you don't know. You can then use that new data to build a targeted marketing campaign.
Ultimately, there's a chance you're going to use both platforms to some degree in your marketing. Your CDP can handle the heavy lifting of monitoring and categorizing website visitors, while you might use a DMP to take some of that data and use it to build advertising audiences.
No matter what platform you use, there’s no reason not to make sure the data has been collected in a legal, ethical way. The journy.io way.