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The DMP is Dead, long live the CDP

July 24, 2018

DMPs for the past five years have been the must have technology for savvy marketers in NZ. But there is a new kid on the block that marketers really need to get their heads around, as I would suggest that they need to stop thinking about DMPs, and turn their attention to the world of CDPs.

There are many articles that do a better job than I could of explaining the difference between a Data Management Platform (DMP) and a Customer Data Platform (CDP) but I think the image below gives the most succinct overview

 Source: Treasure Data

 

A CDP, again from Treasure Data continues to explain that “The enterprise CDP brings together all of your data sources, including CRMs, DMPs, loyalty applications, point of sale systems… for a single, actionable view of your customer. A CDP unites customer profiles into a single personal identification number (PII). A CDP has the flexibility to collect raw, event level data without the need to predefine fields. This allows you to later query on data that you didn’t predefine.”

So, on one hand a DMP is intended to serve one function; to enhance advertisement platforms, but on the other hand, a CDP manages the real customers of a company; gathering data from the company database, CRM, websites, apps, or transactional systems. This can then be used by the company to prepare offers, promotions and customize emails. The CDP can also be used to create customized web content that the customer views when logged into the website, and also push audiences into digital media.

User profiles for DMPs are focused on segmenting and categorizing the customers and seldom last over 90 days, based on the lifespan of the cookie. Since the data is anonymous, the DMPs make a data selection based on several field values known as probabilistic matching. CDPs on the other hand, do away with the guesswork and makes a data selection based on a specific customer identifier, such as an email address or phone number. Since this match is consistent across an entire data set, it is known as deterministic matching.

 

CDP can integrate online and offline data and uses customer analytics and machine learning to create targeted marketing campaigns, whereas a DMP can only provide an anonymous audience for advertisements.

So, if you have a large customer database that you want to fully understand and activate, as well as using data from your customer base to build look-a-likes then now is the time to think about implementing a CDP. Across most businesses in NZ, with a small population, and across most industries not a huge competitive set then truly understanding your customers at an addressable level rather than anonymously segmenting them for the purposes of advertising seems like a no-brainer.

That’s not to say a DMP is without its uses – for businesses without loyal customers, high churn, and multiple competitors then using third party data to target advertising still makes a great deal of sense, but for everyone else start investigating the world of the CDP…

 

 

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