CDP vs CRM: What Is a DMP? How Does It Differ?
DMPs are centralized data repositories that collect, store, analyze, and activate vast amounts of data from multiple sources. These platforms are designed to sort through numerous raw data types, transforming them into valuable, actionable insights. DMPs offer businesses a comprehensive view of their customers, providing detailed audience segmentation for precise advertising strategies. DMPs are essential for building targeted advertising campaigns, especially for acquisition marketing, as they enable marketers to reach new audiences effectively.
How It’s Used in Advertising
In the world of digital advertising, DMPs have become a vital tool. The unique ability of DMPs to analyze and categorize data enables advertisers to create detailed audience segments, helping marketers identify and target specific audience segments for more effective campaigns. This facilitates precise and personalized targeting.
Take This Scenario as an Example
A customer visits an online apparel store, browses a specific product category, such as formal shirts, and leaves without making a purchase. A DMP captures this browsing behavior, segments the user under “interested in formal shirts,” and feeds this information back to the advertisers. This data also contributes to building dynamic user profiles, integrating customer traits and behaviors to enable more personalized retargeting. Consequently, marketers can re-target the customer with personalized ads featuring formal shirts on different online platforms they visit, increasing the chances of them returning to make a purchase.
What to Look For
If you’re considering integrating a DMP into your digital advertising strategy, there are several critical factors to consider.
First, a good DMP should offer seamless integration with various data sources, enabling it to collect and process data from a wide range of inputs, such as web browsing cookies, mobile applications, Customer Relationship Management (CRM) systems, and third-party data providers. The quality and relevance of the data collected from these sources are essential, as DMPs collect data to improve targeting accuracy and generate actionable customer insights.
Second, look for DMPs with robust data processing capabilities, especially those that use advanced AI algorithms. Such platforms quickly and efficiently sift through large volumes of data, filtering out the noise and highlighting the most valuable insights so marketers can double down or pivot in time.
Privacy compliance is another crucial aspect. With ever-stringent data protection regulations like GDPR and CCPA, it’s vital to choose a DMP that ensures the privacy of user data and complies with relevant laws.
When evaluating third-party data providers, keep in mind that these are often data collection companies that supply anonymized data for marketing purposes, which may raise privacy and quality concerns.
Finally, the ability to create detailed audience segments and facilitate effective targeting is the essence of a DMP. Ensure that your chosen platform meets the needs of your teams, campaign types, and current data.
The Leading Data Management Platform (DMP) Solutions
Several leading DMPs (data management platforms) are widely used by businesses around the world. Adobe Audience Manager is a leading data management platform used for audience segmentation and activation, renowned for its comprehensive data management capabilities. It allows businesses to consolidate audience data from various sources, create detailed audience segments, and activate these segments across different marketing channels.
Another example is Oracle BlueKai, a cloud-based DMP known for its extensive third-party data marketplace. BlueKai offers advanced data collection, analysis, and segmentation capabilities, enabling businesses to develop precise, data-driven advertising strategies.
Salesforce has its own platform, with Audience Studio offering comprehensive audience profiles, along with Einstein-powered machine learning insights that inform which contacts best fit a brand’s segments. However, Audience Studio is in the middle of a phase-out see how DESelect Segment offers the same benefits without requiring a lengthy data migration.
Data Management and Storage
Effective data management and storage are at the heart of any successful customer data platform (CDP). In today’s digital marketing landscape, businesses collect vast amounts of customer data from a variety of sources, ranging from first-party data like website interactions and purchase history to third-party data acquired from external partners. A CDP is purpose-built to bring all this information together, breaking down data silos and providing a unified, actionable view of each customer.
A robust customer data platform enables organizations to manage customer data from multiple sources, including CRM systems, marketing automation tools, social media platforms, and even mobile devices. By centralizing data collection and storage, a CDP ensures that marketing teams can access accurate, up-to-date customer profiles, which are essential for delivering personalized customer experiences and driving effective marketing campaigns.
One of the key advantages of a CDP is its ability to integrate seamlessly with other systems, such as customer relationship management (CRM) platforms and data management platforms (DMPs). This integration allows businesses to manage customer data holistically, combining behavioral, transactional, and demographic data into a single customer profile. As a result, marketing teams can better understand customer behavior, tailor their digital marketing strategy, and engage customers across multiple channels.
Data governance, quality, and security are also critical components of a modern CDP. With increasing concerns around data privacy and compliance, businesses need to ensure that their customer data is managed responsibly. A customer data platform cdp provides advanced data management features, including customizable data governance policies, data quality controls, and robust security measures to protect sensitive information. This not only helps businesses comply with regulations but also builds trust with customers by safeguarding their data.
Another important aspect of data management within a CDP is data retention. The ability to store data for extended periods allows organizations to analyze historical data, uncover trends in customer behavior, and refine their marketing campaigns over time. Customizable data retention policies give businesses the flexibility to define how long data is stored and when it should be deleted, ensuring compliance with both internal policies and external regulations.
Ultimately, a customer data platform empowers businesses to manage customer data more effectively, eliminate data silos, and unlock deeper customer insights. By providing a centralized database for storing and analyzing customer data, a CDP supports personalized customer experiences, enhances customer engagement, and fuels business growth. When evaluating a CDP, it’s essential to consider its data management and storage capabilities, integration with other systems, and support for scalable, secure data retention, key factors that will help your marketing team deliver results and stay ahead in a competitive digital marketing environment.
How DMP Differs from a CRM
Customer Relationship Management (CRM) Overview
Customer Relationship Management (CRM) systems, also known as customer relationship management systems, are platforms designed to manage a company’s interactions with its current and potential customers. Unlike DMPs, which primarily deal with anonymized data, CRM systems manage known customer data, (both behavioral and demographic) such as contact information, purchase history, and interaction records. A customer relationship management platform helps manage customer information, including data on existing customers and the sales pipeline, supporting better organization, collaboration, and sales forecasting.
Popular CRM platforms like Salesforce and HubSpot are pivotal to businesses worldwide. These are examples of CRM software used to support business strategy and manage crm data. They provide a centralized system that handles sales, marketing, and customer service, enabling businesses to manage their customer relationships efficiently. CRM data and customer information are used to improve sales pipeline management and support overall business strategy by enhancing revenue optimization, customer satisfaction, and loyalty.
The Relationship Between CRMs and DMPs
While a DMP and a CRM serve different purposes, data CRMs focus on managing sales and relationship data, while DMPs handle broader audience data. They aren’t mutually exclusive and often complement each other effectively. By integrating a CRM system with a DMP, businesses obtain a comprehensive view of their customers, blending known data from the CRM with the anonymized behavioral data from the DMP. Combining a CRM’s data with a DMP’s anonymized data provides a more complete view of the customer’s data. This combination offers businesses an enriched customer profile, enhancing their ability to deliver personalized experiences to places customers most often visit.
Different Applications of CRM vs DMP
The primary difference between a CRM and a DMP lies in their applications. CRMs are primarily used to manage the breadth of direct customer relationships, supporting sales, service, and marketing processes. They enable businesses to track customer interactions, manage leads, and facilitate customer service. CRMs are specifically designed to manage customer facing interactions such as sales calls and support tickets.
On the other hand, DMPs focus on providing data for targeted advertising. They aggregate disparate data points from multiple sources and analyze anonymous user behavior and demographic data, facilitating the creation of detailed audience profiles. These profiles help marketers and advertisers deliver personalized ads, thus enhancing the effectiveness of their campaigns.
What is a Customer Data Platform (CDP)?
Overview
Another critical component of the modern marketing technology stack is the Customer Data Platform (CDP). Similar to a DMP, a CDP collects and manages customer data. However, unlike DMPs, CDPs create a persistent, unified database of known customers. Collecting data from multiple sources, including both online and offline touchpoints, is essential for building accurate and comprehensive customer profiles. They combine data from all sources and track customers across all touchpoints, providing a comprehensive, 360-degree view of the customer.
Examples
CDPs like Salesforce Data Cloud and Exponea have gained popularity for their ability to aggregate customer data from various sources into a single platform. A recent customer data platform report highlights how businesses leverage CDPs to optimize their data and gain actionable insights across multiple channels. These platforms enable marketers to create targeted marketing campaigns based on comprehensive, unified customer data.
Fun Fact: DESelect works with Salesforce Data Cloud! Find out how to leverage the full impact of your Cross-Cloud data for segmentation both large and small!
How They Work Together
The combination of a DMP and a CDP significantly enhances a company’s advertising and marketing capabilities. While a DMP enables targeted advertising based on anonymous user behavior, a CDP offers insights into known customers, providing a basis for personalized, cross-channel marketing. Integrating CRM data with both CDP and DMP data delivers a more comprehensive customer view, enabling marketers to activate richer, real-time customer profiles for improved marketing and advertising outcomes.
The Bottom Line: What’s Best For Your Business?
Deciding whether to invest in a DMP, a CDP, or both is not a straightforward decision. It requires a thorough understanding of your business needs and objectives.
DMPs, CRMs, and CDPs each serve distinct but complementary roles. If your primary objective is to improve targeted advertising, a DMP should suffice. On the other hand, if your team is focused on making more comprehensive changes to customer experiences across all channels, a CDP would be the better choice. CDPs provide a unified view of each customer, enabling businesses to deliver personalized experiences at every touchpoint.
However, for a holistic approach to data management and to maximize your marketing and advertising effectiveness, having both a DMP and a CDP could be the best route. When a DMP, CDP, and CRM work in unison, they create a comprehensive data infrastructure that fuels personalized customer experiences, targeted advertising, and effective customer relationship management.
Gathering and storing data are one side of the marketing ops coin, but having the right audience segments is just as essential as the actual campaign deployment. Learn how marketing teams create quick, granular, and effective segments with DESelect Segment.
