CDP vs. DMP: Which one meets your needs?

The difference between CDP and DMP

CDPs and DMPs work in different ways to achieve different goals.

CDP

CDPs are used for creating personalized customer experiences by collecting and tying together customer data through personally identifiable information (PII)—like email addresses and phone numbers—to create a 360-degree view of the customer. The unified customer data, combined with artificial intelligence (AI), generates insights that optimize business processes and customer engagement in business-to-business or business-to-consumer settings.

The primary data source for CDPs is first-party data from customers who have directly interacted with the business online (through website interactions, campaign engagement, online purchases, and loyalty programs) as well as offline (through in-store purchases, in-person events). CDPs may also be able to use second-party data (sourced from businesses that collect and sell first-party data) and third-party data (collected through anonymous identifiers like cookies) in addition to first-party data.

Insights from CDPs are valuable not only to marketing teams for campaigns and churn analysis, but also to sales and service teams who want to personalize customer experiences. For example, cross-sell or upsell recommendations can help a salesperson focus discussions on relevant products that a buyer might want. Next best action recommendations can help a salesperson personalize future interactions. Similarly, calculating a customer’s lifetime spend can help service organizations prioritize calls from high-value customers.

DMP

Digital marketing agencies and in-house marketing teams use DMPs to identify audiences by categories like demographic, behavior, or location to better target digital advertising campaigns.

DMPs aggregate high volumes of anonymous customer data originating from multiple sources. The primary data sources for DMPs are second- and third-party data. DMPs must work with anonymous entities like cookies, devices, and IP addresses to exchange information about audiences while protecting personal privacy. Because different companies—including competitors—can usually access the same anonymous data, a DMP does not provide a sustainable competitive advantage. Instead, it helps digital marketers better understand and target audiences.