CDP vs Data Management Platforms

What are the differences between a Customer Data Platform and a Data Management Platform? Both CDP and DMP are AI-powered analytics solutions. A CDP captures data of customers so that companies can use it to provide better and customized services and recommendations to their customers. A DMP on the other hand, is used mainly by the advertising industry. Data is collated which is then used for more customized and accurate targeting of customers to boost sales and create engaging content. There’s also a difference between the to when it comes to their data mechanism and system. CDP gathers data from first-party sources, whereas DMP gets the data from third-party sources. First-party data is data that’s collected directly from the customer itself. The data could have been derived from customer feedbacks or surveys. Third-party data is gathered via cookies, IP addresses etc.

DMPs are used to collect information about customers for categorizing customers and its information that’s short-lived and used for intermediary purposes. CDPs are based on concrete customer profiles and customer preferences and user habits. The information becomes a solid database which is a bankable asset to be utilised by companies. DMP is data that analyses the behaviour of a customer when it comes to the number of times, they’ve visited a website, and the information that they viewed. CDP is data that can assess whether a customer is a prospective customer for a company who will purchase their products or show an interest in it.

DMPs are used most prolifically in digital advertising industries and informs marketing strategies and identifying target audiences. The data captured from CDPs can be used on social media channels, for performance marketing etc. It even understands the social environment and the pulse of the social crowd.

So which daya system is more convenient for you? Which one is best suited to define customer marketing analytics for you? There are many factors that need to be taken into consideration when it comes to choosing between the two. You need to know what purpose you will be using the data systems for. What is your main goal? Who are you trying to reach? Is its real-time personalization or another key objective?

CDP is the most impactful for you if you’re in the advertising trade, because DMPs cannot adequately capture identities and customer profiles. With CDP, all the information is stored in one space, which makes it easy to utilize and analyse. DMP on the other hand stores its data in more than one place. CDP captures data and improves upon that data which is a big plus for companies in the long run. The data collated via a CDP can only be used in the short run.

All these points need to be considered when you want to make a choice between the two data systems.

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