DMP vs CDP: Which is Better for You?

DMP vs CDP: CDPs, known as customer data platforms, are often confused with DMPs, or data management platforms. Both CDPs and DMPs utilize data to help marketers build audiences. You might be thinking, what differentiates the two? The answer is the difference in what type of data sets are collected.

customer data platform


CDPs collect data from users that exist on your website, app, etc. You are then able to interpret this data and create posts and emails customized to your customers’ needs. CDPs collect mostly first-party data and some second-party data as well. DMPs take exceptionally large data sets that they either purchase from a data seller or acquire by a huge audience like social media platforms. This data is often used to create advertisements. DMPs primarily use third-party data, along with a small portion of secondary-data. 

First-Party Data

First-party data is data that your company collects. This type of data is deemed the safest data to collect and possess the most value to your company. First-party data allows you to track and understand exactly where your data came from. It shares with you why it was collected in the first place. An example of first-party data is the customer’s purchase history. First-party data is important because it can get collected for free, and the owner has the customer’s complete consent to see and use the data. This decreases the risk for legal issues. 

Second-Party Data

Second-party data is quite different. It is a company’s first-party data that they sell to another company they collaborate with. In this transaction, the buyer and seller directly connect and agree on the terms and conditions of the data. This can help foster relationships with other companies and connect with them better. Second-party data can include another company’s survey responses, social media activity, etc. Second-party data grants you access to more insights on similar customers from other companies. This can help your ability to precisely create marketing plans that align with the needs of your target market. In other words, you have a better understanding of what your customers like and dislike, so you can better serve them. 

top data management platforms

Third-Party Data

Third-party data is obtained by data-collection companies and then made available to any company that has a desire to purchase it. This is the worst type of data to collect, as it cannot be traced and there is no evidence to prove its accuracy. For all you know, the data-collection company might be providing extremely inaccurate or falsified data. The data might have also been collected unethically. While using third-party data does have some risks, it does allow your business to once again understand how to target your customers on a deeper scale. Sometimes first and second-party data is not available, and resorting to third-party data is better than nothing. 

Define DMP

Defining a DMP is tricky because there are so many parts to it. A data management platform is a platform that collects data from various sources. It enables companies to understand insights about their customers in more detail. Again, DMPs collect very large data sets that are often anonymized. Facebook is a great example of a DMP. It collects its users data and then enables advertisers to use that data to advertise its products to users who fit their target market. So when you see ads break up your video on Facebook, that is the usage of a DMP who determined you meet the criteria to be a potential customer for a particular company.

Function of a DMP

After DMPs collect their data from either third-party or second-party data, they make it available to platforms including: DSPs, SSPs, and ad exchanges. These platforms then use this data for things like targeted advertising, customized content, and more. Target advertising focuses on defining traits, characteristics, and preferences of a consumer so that they can personalize their experience.

An example of this would be a company who collects information from a customer’s transactions and learns through their purchase of prenatal vitamins that they are pregnant. They could then sell this information to another company, who could then create custom mail flyers and advertisements with pictures of cribs, diapers, etc. The same idea goes for customized content. A social media platform can find out the same information and show you sponsored ads from companies that sell baby products. 

Building a DMP Audience

First, you want to organize the data you collect. Next, in your DMP, you will want to build audiences that are unique. This step will allow you to determine the segments that provide the greatest value to your company. After you identify these segments, you can use them within your digital channels. Overall, building a DMP audience will give you a better understanding of where you should be advertising and what demographic that includes. When you build your audience, you should be aware of what data points to use. These include: location, age, gender, interests, opinions, browsing history, size of family, preferences, and social networks. 

define dmp

Top Data Management Platforms

There are a variety of effective data management platforms your company can use. As mentioned earlier, DMPs are an effective way of storing and using data to improve your marketing strategy and company overall. Next, we are going to discuss several different data management platforms that are reputable and provide the most value for your company.


Lotame is the industry leader for DMPs. It gives information from various sources including social media platforms, email, apps, CRM tools, and more. Lotame focuses on increasing engagement and unifying your data. They work with marketers, agencies, and publishers. Lotame ensures quality data and they give direct access to hundreds of premium sellers.

Salesforce DMP

Sealesforce has their very own DMP segment that helps marketers who are wanting to unify, capture, and action data within various touchpoints. Salesforce capitalizes on artificial intelligence along with machine learning. Using these helps to supply a company with customer data profiles, multi-channel engagement and aids in engaging with a company’s current customers.

OnAudience specializes in helping companies create audience segments through demographics and actions such as age, gender, online behavior, interest, etc. This helps improve the various advertising activities that companies take on. It also provides your business with access to a plethora of new customers. It boasts having access to over 12 billion profiles.


Snowflake is a multi-cloud strategy. It is unique from the other data management platforms as it offers DMPs and runs it at a high speed. Snowflake also offers a built-in performance which contributes to its ability to be used with ease.

SAS Data Management

SAS is very effective in collecting data from legacy systems and Hadoop. Users are able to easily update data, modify processes, as well as perform their own analysis on generated results. SAS is on the more expensive side, so it may not be a great option for small businesses.

cpd vs dmp

Customer Data Platform

CDPs goal is to morph all customer data together and create united customer profiles. This allows a marketer to use it with ease. CDPs save data on your customers over time and merge this history to create a single history and profile for each of your customers. They also keep records of your identified customers for use for anything you might need to help enhance your business (not just for advertisements.) CDPs have many benefits, which we will discuss in more detail below.

Benefits of Customer Data Platforms

The biggest benefit to CDPs is that the data is stored in one place. We can see data about a customer’s in-store and online activity without the hassle. This allows for less frustration and the ability to better serve your customers. CDPs also give a thorough sum of who the customer is. It reveals the customer’s transaction history, frequently purchased product and more. CDPs ultimately increase a company’s revenue. By knowing every detail of the customer, the company is able to target the right people with the right message which can help further develop brand recognition. This can increase a company’s conversion rates significantly.

Customer data platforms can help a company identify new market segments that they were missing out on. They are able to see what category of customers make up their target market and what about the products is appealing to them. They can double dip and use this research to determine what kind of products would satisfy other customers and align with their preferences that did not work for their current customers.

dmp vs cdp

DMP vs CDP: Which is Better for Your Company?

Taking advantage of data collection can help your company thrive. Not only does it help put customers into categories, but it can help strengthen your marketing strategy and the way you engage with your customers. Every company must conduct research to understand where the market is headed and what changes to make to continue to satisfy their customers. If your customer’s need is not met, then you will not be successful with your brand loyalty and conversion. If you need help deciding between DMP vs CDP for your company, contact SEO Design Chicago today. We provide analytics and reporting services to help companies reach their full potential.

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