DMP, CDP, or a Bit of Both?
Striking A Balance Between Data Management Platforms and Customer Data Platforms
The success or otherwise of digital and programmatic advertising relies on the effective gathering, governance, and analysis of huge amounts of information. Dedicated software is ideal for this, and in programmatic circles the main contenders are the data management platform (DMP) and the customer data platform (CDP).
Both have their distinct advantages and limitations but as we’ll see, the right solution for your programmatic marketing needs may actually be a combination of the two, rather than an either/or scenario.
The Data Management Platform (DMP)
A data management platform (DMP) is an information handling system that can collect, manage, and integrate vast amounts of structured and unstructured data. This information may originate from a range of sources relevant to advertising.
Each time a customer visits your web site or uses your mobile app, they generate information that if properly used, can help in shaping your marketing strategies and increasing your number of conversions. Sources of information include:
• Numbers of page views, user navigation, and behaviour on a brand’s web pages.
• Opening rates, clicks, and conversions from email marketing campaigns.
• Information on app usage and browsing activity from mobile devices.
• User demographics, Likes and follower statistics, comments, and shared content from social media.
• Actions stemming from customer interactions with online advertising.
• General demographic information.
• Internal data from Customer Relationship Management (CRM) systems, etc.
• Data from external sources.
Marketers and advertisers can use demographics, information on browsing behaviour, location, devices, and other data to build customer segments and track their performance.A data management platform makes this task easier, allowing marketers to more successfully target their promotions.
A DMP brings all the relevant information together on a single platform, allowing for a unified view, and breaking down the data silos that often allow vital opportunities to go missing. This unified view makes it easier to identify new target audiences and consumers, and some DMPs include dedicated tools for discovery and targeting.
Data management platforms also allow for the coordination of multiple campaigns involving different advertising networks and publishers. DMP analytics typically involves matching up anonymous cookie data with information about your various audiences, and information provided by data vendors. The usual aim is to help you find new prospects who fit the profile of your existing customers.
The work of a DMP is ongoing, rather than a one shot deal. Data management platforms feature constant monitoring and continuous reporting, as they aggregate data, analyse it, and transfer it to various ad servers. Constant optimisation leads to smarter and more relevant ads being shown to the consumer, strengthening the effectiveness of your programmatic spend.
The Customer Data Platform (CDP)
Salesforce describes a customer data platform (CDP) as “a marketing database with user-level data”: a platform that brings together a customer database, tools for marketing automation, real-time interaction management, and the management of multi-channel campaigns.
Solutions from the current crop of CDP vendors typically fall into one of two camps. Systems of insight allow marketers to discover new audience segments, and to build predictive models. Systems of engagement enable marketers to deliver personalisation in real or near-real time.
With the growing number of data sources that marketers must contend with, a CDP can help with unifying all this information. A customer data platform also features sophisticated identity resolution technology, making it possible to establish individual customer identities through information that comes from different channels, while remaining compliant with the relevant privacy standards and regulations.
As an aide to customer engagement, a CDP pulls in data from a broad range of enterprise sources, including structured, semi-structured, and unstructured information, to provide powerful insights into customer behaviour and preferences. And customer data platforms provide tools for building progressive customer personas, which enable marketers to personalise customer interactions across multiple channels.
Their Differences in a Nutshell
The CDP Institute makes the distinction between data management platforms and customer data platforms in this way:
“CDPs work with both anonymous and known individuals, storing ‘personally identifiable information’ such as names, postal addresses, email addresses, and phone numbers, while DMPs work almost exclusively with anonymous entities such as cookies, devices, and IP addresses. Indeed, anonymity is essential to the DMP’s role as a way to exchange information about audiences without violating personal privacy. What’s changed is that CDPs are integrating more often with advertising systems, and thus storing more DMP-type information such as cookie IDs with audience tags. Some DMPs are also storing personal identifiers, although these are carefully isolated from situations where anonymity is still important.”
Why Both/And May Be Preferable to Either/Or
Assessments like the above make a clear case for marketers to use DMPs and CDPs in tandem, giving the best of both worlds.
CDP and DMP integration enables marketers to combine data sets from a multitude of sources, including patterns of online behaviour, demographics, mobile apps, customer interaction, social media, CRM, campaign activity, and connected devices. Platforms with AI and machine learning capabilities can enable predictive modelling, and a continuous cycle of analytics that informs all business functions, empowering organisations to create the best experiences for both consumers and advertisers.
By recognising the differences between DMPs and CDPs, and working to their respective strengths, marketers can adopt a more comprehensive and rational approach to identity resolution. A CDP can make the integration of first-party data easier for a DMP to improve ad targeting, while the data management platform can provide a stream of information for the customer data platform, enabling marketers to create more progressive and personalised customer profiles that provide more relevant offers and messages to consumers.
(Image source: Redpoint Global)
Integrating the DMP and CDP allows for more personalised offers across channels, and the creation of dynamic applications (chatbots, interactive displays, etc.) that respond more accurately to customer interaction. All of these improvements will give your programmatic marketing greater lifetime value, and its impact will be easier to measure.
Data Management Platforms (DMP), Customer Data Platforms (CDP) and related matters will all be hot topics at Programmatic Pioneers Summit EU 2020, which takes place at Twickenham Stadium, London, from 1-3 June, 2020. Download the agenda today for more information and insights.