CDP vs DMP: how they are different and how they can help your CX

Learn the difference between CDP and DMP and how they can help your customer experience optimisation in this article!

As businesses continue to gather more customer data to inform their marketing strategies, the use of customer data platforms (CDPs) and data management platforms (DMPs) have become increasingly popular. In Southeast Asia, where the eCommerce market is rapidly growing and customer experience (CX) is a key differentiator, understanding the differences between these two tools and how they can enhance CX is crucial.

CDP vs. DMP: What’s the Difference?

To understand the difference between CDP and DMP, let's start with their definitions first.

A customer data platform (CDP) is a tool that collects, unifies, and manages customer data from various sources and touchpoints, such as website behaviour, customer support interactions, and marketing campaigns.

The primary goal of a CDP is to create a single, comprehensive customer profile by combining together personally identifiable information (PII) of a customer--full name, email address, telephone number, etc.-- that can be used to improve customer experience (CX) across all touchpoints.

On the other hand, a data management platform (DMP) is designed to collect and manage anonymous audience data, primarily for use in programmatic advertising campaigns. DMPs aggregate data from various sources, including third-party data providers, to create audience segments that can be targeted with specific ads.

Customer Data Platforms (CDPs) and Data Management Platforms (DMPs) are both critical tools for managing and utilising data in marketing and business contexts, but they serve distinct purposes and have different functionalities.

For more details, here are the differences between CDP and DMP from various aspects:

1. Data Sources

CDPs typically focus on first-party data sources, collecting information directly from interactions and transactions with customers. This includes data from websites, mobile apps, customer support systems, and more. CDPs prioritise data that can be directly tied to identified individuals.

DMPs, on the other hand, primarily deal with third-party data sources. They gather data from various external sources, including ad networks, publishers, and data providers. DMPs aggregate this data to create anonymous user profiles for targeting purposes.

2. Use Cases

CDPs are used for improving the customer experience and engagement. They enable businesses to deliver personalised content, product recommendations, and targeted marketing messages. CDPs also support customer service by providing comprehensive customer profiles, helping resolve issues more efficiently.

DMPs are mainly used for digital advertising and audience targeting. They help advertisers and marketers segment audiences based on online behaviour and preferences. DMPs are vital for programmatic advertising, retargeting, and delivering relevant ads to specific audience segments.

3. Data Integration

CDPs are designed for data integration across different channels and touchpoints within an organisation. They aim to create a single, comprehensive customer profile by merging data from various sources. CDPs often include identity resolution capabilities to ensure data accuracy.

DMPs focus on aggregating and segmenting data for advertising purposes rather than creating comprehensive user profiles. They do not typically perform extensive data integration across an organisation's internal systems

4. Data Ownership and Privacy

CDPs emphasise data ownership and are typically used to manage and protect customer data, often with a strong emphasis on compliance with data privacy regulations, such as GDPR. CDPs are primarily concerned with data related to known individuals.

DMPs deal with anonymised user profiles and are less concerned with data ownership since the data is often shared with third-party partners for advertising purposes. Privacy regulations are still relevant, but the focus is different, as DMPs handle data tied to anonymous users.

5. Marketing and Advertising Objectives

CDPs align with broader marketing and customer engagement goals. They support personalised marketing, customer loyalty, and improving the customer journey. CDPs aim to enhance customer relationships and increase customer lifetime value.

DMPs are more advertising-centric, focusing on optimising ad campaigns and targeting specific audience segments for advertising purposes. Their primary objective is to maximise the effectiveness of digital advertising efforts.

In summary, while both Customer Data Platforms (CDPs) and Data Management Platforms (DMPs) deal with data, they are distinct in their focus, use cases, data sources, data integration capabilities, data ownership, and objectives. CDPs are tailored for customer-centric marketing and engagement, while DMPs are geared towards advertising and audience segmentation for digital campaigns.

How CDPs and DMPs can enhance CX

1. Personalisation

Personalisation is a key driver of customer experience, and both CDPs and DMPs can help businesses deliver more personalised experiences to their customers. CDPs can help businesses create a unified view of each customer's behaviour and preferences across channels, enabling them to tailor their marketing messages and offer to each individual. DMPs can help businesses create audience segments based on demographic, behavioural pattern, and contextual data, which can be used to deliver targeted ads that are more relevant to each persona.

For instance, a Thailand cosmetic brand approached ADA during times of uncertainty. With the combination use of CDP and DMP, we identified the different personas and created multiple audience segments based on the data we gathered. Then, targeted ads with different messaging were delivered to each persona. Through personalisation, brand engagement increased by 156%.

2. Omnichannel Marketing

Southeast Asia is a diverse region with a wide range of digital touchpoints, from eCommerce websites to social media platforms to messaging apps. While CDPs can help businesses deliver a consistent, personalised experience across all these touchpoints by unifying customer data from each source, DMPs can be used to deliver personalised ads across multiple channels, helping businesses reach customers wherever they are – especially on the channels they prefer.

3. Customer Insights

Understanding customer behaviour is essential for delivering a great CX, and both CDPs and DMPs can provide valuable insights into customer behaviour. CDPs can help businesses identify patterns and trends in customer behaviour, enabling them to optimise their marketing strategies and improve CX over time. DMPs can provide insights into the characteristics and behaviours of different audience segments, which can be used to refine targeting strategies and improve the relevance of advertising campaigns.

A good case in point: Yoodo, a digital telco provider in Malaysia wanted to acquire new users upon their launching, especially the young and urban. Deriving insights from DMP, we created multiple unique audience segments based on consumers’ digital footprints. We personalised our campaign messaging and targeted different personas with different ads. The results? Monthly activations increased by 112% and 6,600 monthly activations from retargeting efforts.

4. Compliance

Data privacy and compliance are gaining more attention in Southeast Asia, with regulations such as the General Data Protection Regulation (GDPR) and the Personal Data Protection Act (PDPA) being implemented in many countries. With CDPs, businesses can ensure compliance by providing a centralised, secure repository for customer data that can be accessed and managed according to local regulations. DMPs can also help businesses comply with regulations by providing transparency into how customer data is collected and used in advertising campaigns.

Delivering a better customer experience

Both CDPs and DMPs play an integral role in enhancing customer experience, whether you’re in the beauty and fashion, FMCG, telco, or gadgets and electronics industry. By understanding the differences between these two tools and how they can be used together, you can develop more effective marketing strategies based on valuable customer insights and deliver better experiences to your customers through personalised experiences. All while ensuring compliance with data privacy regulations.

Curious how CDP and DMP can drive your business growth?

ADA x Treasure Data partnership leverages our deep experience in media solutions and Treasure Data's industry-leading technology to deliver truly exceptional customer experiences. We specialise in building custom Treasure Boxes, which are tailored to meet the unique needs of each client. Our experts have a deep understanding of both technology and industry, allowing us to deliver customised solutions that drive real business results.

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CDP vs DMP: how they are different and how they can help your CX

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CDP vs DMP: how they are different and how they can help your CX

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