Customer Data Unification
What’s the difference between a CDP and a DMP?
If you read a high level description of a CDP and a DMP, you might think they perform the same functions. They both help brands build user profiles for use by downstream systems.
But not all user profiles are created equal, and the use cases these two platforms light up have little overlap. By looking at the nature of the unique profiles and how brands use them, distinct value and utility become apparent.
CDP: Known Customer Profile Builder
CDP = Customer Data Platform
CDPs unify a brand’s first party data about known customers to build unified customer profiles. Data sources include eCommerce transactions, point of sale transactions, CRM data, clickstream data, loyalty databases, email response data, social interaction data, and any other dataset that contains known customer data.
CDP profiles retain all PII (personally identifiable information). This includes email addresses, mailing addresses, full name, birthdate, historical purchases and other transaction data, social and email interactions, preferences, and more.
Below is a visualization of a fictional CDP customer profile built from a brand’s first party data about a known customer. This profile never expires and will only become richer as the customer continues to interact with the brand over time.
CDPs are, categorically, for brands looking to drive personalized, people-based marketing at scale, and are incredible customer retention engines. Do you want to reach your highest value, in-store customers with personalized emails? Do you want to address a customer by name on a flight or during a customer service call? Do you want to target specific micro-segments with 100% match rates on social? Then you need a CDP.
CDPs excel at enabling targeted, personalized interactions through all your channels: direct mail, email, site, push notifications, social and Google advertising, and in-person interactions using a clienteling application.
DMP: Anonymous User Profile Builder
DMP = Data Management Platform
In contrast, DMPs build anonymous user profiles. They do this by capturing clickstream data from site visitors via tags, and assigning attributes (defined ahead of time by the brand) to the user’s profile. Any offline data a DMPs onboards must first be anonymized, hashed, or otherwise de-identified.
Below is a visualization of a real-world DMP user profile. Again, it is an anonymous profile (which means it contains no PII such as name or email). It is unified around device and/or browser IDs.
Here are some of the attributes listed in the actual DMP profile above:
Marital Status: Single
Marital Status: Married
Female Head of Household
Male Head of Household
Net Worth: $25,000-$49,999
Net Worth: $50,000-$74,999
Net Worth: $75,000-$99,999
Net Worth: $100,000-$149,999
Net Worth: $150,000-$250,000
Net Worth: $500,000-$749,999
Net Worth: $750,000-$999,999
This profile tells a brand that the user is either male or female, married or single, and has a net worth somewhere between $25K and $999K. There are also a string of attributes about interests based on an interpretation of site clicks.
DMPs are designed for customer acquisition through paid advertising. First built to generate audiences for ads on publisher’s sites, they have since broadened to work with DSPs, ad servers, and Google (though not with Facebook) for loosely targeted advertising.
CDPs build known customer profiles rich with PII, transactions, and preferences. These profiles enable personalization across channels, and are useful for building long term through a variety of use cases.
DMPs produce anonymous user profiles with attributes assigned to devices and browsers. These profiles enable targeted advertising with varying degrees of accuracy.
Today’s acquisition marketers have some tough choices to make when it comes to their advertising strategy. DMPs, onboarding tools, ad servers, Facebook, and Google all have different advertising offerings. Variables like in-house identity graphs, mobile strategies, and the intricacies of your unique tech stack all add to the complexity. In my next post, I’ll share the pros and cons of your different options, so you can begin to forge the best path for your specific advertising goals.