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Industry Insights

DMP or CDP, What’s the Difference? Managing Your Data Effectively

By Akhila Sriram on August 27, 2021

Data Management Platform and Customer Data Platform have become nearly interchangeable in the world of digital business. Both are used to collect and understand the vast amounts of customer data available online, from what sites they visit, to what choices they make, to what purchases they commit to.

The Basics of Data Collection and Analysis

As mentioned in our blog series around third party cookies, first party data is that collected by a business itself, while third party data is collected by outside organizations and either sold to businesses or rented for their use in marketing and advertising efforts. First party data is collected and secured by the same organization that will use the data, while third party data is collected and amassed by organizations that don’t make use of that data for their own purposes.

The Nuances Between DMP or CDP

A data management platform, or DMP, contains third party data on your current and potential audience and their online behavior and information. DMPs don’t contain identifiable information attributed to these data points, instead showing trends or segments of online users and what behaviors they can be grouped into. These groups can be based on similar actions taken, similar interests expressed, or similar demographic attributes. A DMP by itself can’t help your business with anything, since all of the information is not specific to your business or audience.

A customer data platform, or CDP, primarily stores 1st party data on your business’s customers, but can integrate with a DMP to give you richer insights. The data stored in a CDP can include the purchases customers considered or made with your business as well as any website tracking information or form submissions they made. This information is important for understanding your current customers and what their current actions, behaviors, and decisions are.

The Advantage of Combining a DMP and a CDP

A DMP by itself gives great information for targeted audience groups with advertising, because you can see where different groups go online, based on their interests. A CDP by itself is great in understanding your business’s specific audience and the actions and decisions they make within the confines of your online business presence.

In tandem, a DMP and CDP paired together can help you understand effective marketing opportunities by linking your current audience’s interests and behaviors, as contained in the CDP, to potential audience groups, as attributed in segments by a DMP. This way, you can target ads to specific groups better and make your messaging more impactful. You can also use the security of your first-party data to leverage the anonymity of third-party de-identified data for understanding who your audience is and why they make the decisions and choices they do.

Understanding the Why Behind DMP or CDP

Picking one or the other of DMP or CDP may be a capacity as well as financial decision. Having so much data and information at your business’s fingertips is powerful, but using it effectively takes investment of money, time, and technology. Just because you can have all of that data within your grasp doesn’t mean your business needs it in order to make better planning and strategy decisions. In fact, having so much data available could lead to worse decisions if the data isn’t handled properly. And having either one or the other, will only give you half of the benefits of the access to such data.

A CDP by itself gives you customer data along with personally identifiable information (PII). That’s why CDPs must be kept secure, to best protect this sensitive information on who your customers are and how they shop. A DMP by itself gives you access to data about groups of online users, which can help you understand trends and behaviors, but won’t let you directly connect it to your business needs and plans.

How OSG Can Help You Make the Most of Your DMP or CDP

At OSG, our solutions take customer and business data to new heights, using our AI/ML-powered technology to parse huge amounts of structured and unstructured data to give you the insights you need. From segmenting your customers based on their needs of your business, to marketing based on personalization at scale to get the best results, our solutions depend on effective data collection to give you intelligence on your audience.

DMPs and CDPs are warehouses full of data potential for building your brand strategy, increasing your brand awareness, and finding new potential audiences for your products. Let us help you find the potential uses and applications for your business data so you can continue growing, and we can support your growth for the long run.