Data: One of the most important things. Without it, you wouldn’t be where you are today. Although, how much do you actually know about data management?
Data solutions. THE number one form of technology being implemented into companies. Companies, implementing this technology, experience a further 30% growth. With data driven marketing strategies, they are 6 times more likely to be profitable than competitors in their industry. This is why CDPs and DMPs have been growing at such a fast rate.
With the industry growing strong, it can now become hard to find the right data platform for your organisation. What are the different type of data platforms? More importantly, what actually are they?
Focusing on insights and predictions, data platforms locate and organise the data around you and your organisation while also, promising results.
However, how can you find the right data platform and will it even help with the progression of your business? Can it reach them goals you’re aiming for?
What, exactly, is the difference between CDPs and DMPs and, how can they both support you?
Interested in lead conversion and data? Have a look at our blog ‘lead conversion in email marketing’
Customer Data Platform (CDP)
CDPs are responsible for collecting different forms of data from a range and variety of sources. By collecting this data and compiling it into a “user profile”, you can target the right audience from this segmented data using a predefined set of rules. This data collection can be achieved through social media and marketing tools such as Facebook.
By “knowing” your customers and target audience, you can capture them more effectively. However, all the knowledge around CDPs has come from years of practice via built-in data science, AI and machine learning.
So, how can a CDP help you?
Trying to find the right information and data about your audience is key. A lot of the data captured is useless. Focusing on these insights, a CDP should tell you the information about the customers you are trying to attract. They also uncover real time insights on information you currently do not know about them.
Is a CDP only possible with data-science?
Without the concept of a CDP with data insights, more technology means more data capture. Technology and it’s advancements have made personalisation harder. This also means, more work needs to be done.
It leaves your team and organisation guessing without the right information at hand. When 50% of customers say their brands don’t meet the “customer experience” expectations that they are striving for, this is because you simply can’t guess data.
The value of CDPs
CDPs are about understanding and helping your audience move along a journey, becoming a lead and converting those leads into business. Eliminating bottlenecks along this journey is important but, you also need to consider the speed of the journey, from start to finish.
The Economist, for example, use every aspect of CDPs. A CDP is accessible to the marketer, allowing you to skip lengthy data requests thus, getting straight to the heart of your customers in real time.
A CDP, mixed with AI, can help you automate this process. Not only will you get better results, you’ll get these results quicker. This also takes the pressure off of your team allowing them to act on this data, targeting the right content to give to your audience in order to capture them.
Based on patterns and trends in the data, automation of these results allows you to make each lead an individual. Companies such as Netflix and Spotify are perfect examples of personalisation with these form of leads.
Data Management Platform (DMP)
In connection to CDPs, DMPs allow for a place to store the data and customers insights. The difference is, CDPs use first party data collected directly from your customers. DMPs however, rely on anonymous third party data information that is purchased. They aggregate data from a variety of good quality insights. This data is used for target advertising, the type commonly seen on social media platforms.
Taking key data from third party sources such as CRM systems, allows you to normalise, configure, sort and conclude it. This also makes it available to marketers to build and distribute online campaigns and measure results.
The value of DMPs
DMPs focus on third-party data, value mostly lies with the aspect of advertising to “prospective” customers.
Collecting this data from online sources, DMPs allow you to target those who fall into certain categories. You’ll also be able to place them in certain pools using the data that has been collected. However, Third-party data can be unreliable. Many organisations are actually not satisfied with their DMPs.
So, how can DMPs actually help an organisation?
Currently, they don’t sound too great do they? The thing with DMPs, is the quantity rather than quality of data captured. They are perfect for getting a high volume of new users to your site and “window shopping”. The moment they click an advert or show some form of activity within your website, the CDP takes action, grasping and monitoring data that has just been captured. Using a CDP and DMP in collaboration is perfect for getting that perfect amount of data, quality AND quantity.
Some DMPs are now trying to catch up to the capabilities of CDPs by also collecting first-party data. What’s being done with this data that is being collected?
It’s all well and good being able to collect first-party data but, will it be used for advertisements? And also, is this data still going to be collected anonymously?
DMPs are not well equipped to activate cross channel marketing that is based on a deep understanding of customer behaviour and/or engagement with your business. While it is possible to tailor a DMP to act as a CDP, the two tools are optimised for different purposes, even if they can handle more than one type of data.
Different forms of data
When we talk about data, we are referring to the data collected from customers, through the engagement/activity with your organisation. Data, in this sense, refers also to both first and third party.
The information and data collected can range from information about themselves, through signup forms to activity from “clicks” in an email. First-party data is about your customer’s site, visitors and users. This data is gathered from leads that have, possibly, already been identified. Because you know exactly where your first-party data is coming from, it will tend to be in real time.
Third-party data, however, is customer data collected by sites such as Facebook. This data is purchased rather than collected and since this data type is taken from multiple sources, the accuracy can be harder to gauge.
Why is third party-data so unreliable?
Anyone who browses the web knows that if something is clicked, this is not (normally) by accident. According to one survey, 60% of advertisements are clicked by “mistake”. However, for third-party data collectors, it really doesn’t matter if you deliberately made this click or not.By clicking on that ad, you are now on a list of people who were interested.
A DMP, in this instance, may even categorise you in to a pool that you don’t want to be in. For example, if you clicked on an ad about dogs, then the DMP could see you as a dog owner.
Can CDPs and DMPs work together
You should first ask, what data solution does your business need? This boils down to business goals and your individual use cases.
Third-party data might be useful if your organisation is looking to generate awareness if you don’t have a strong customer base yet. If that is the case, a DMP might be a suitable option for you here.
If, however, your goals are more tailored to customer experience and identifying them customers, using cross channel personalisation, you will need a CDP.
When your goals overlap each other, a combination of both a CDP and a DMP might be your best option.
They can both work together but, you need to remember that the two tools do very different things. The only thing they have in common is data management. If you cross the boundaries between the two platforms, you should implement a CDP before a DMP is implemented.
A DMP might be good at getting those users to your site but, what are you going to do with them once you get there? Will you know how you are attracting your audience? Also, how are you going to keep track of the relationships?
This is where a CDP could also help improve the accuracy of a DMP. The CDP can gather an audience of your best customers and then export this audience into your DMP. Your DMP can then look for people who are more likely to convert using a common “rule” thus, attracting new prospects. Once these new prospects have become “known”, personalisation can take over.
With regulations, such as GDPR, the focus on technology that collects, connects and uses customer data on the public radar and under watchful eyes. Are CMPs and DMPs compliant with the GDPR laws and, should marketers be concerned with the future?
CDPs and data privacy
Because CDPs are collecting first-party data, you (as the organisation and collector of that data) have full control over it. This helps you comply with GDPR and other such privacy regulations. You need to know what data you are collecting and what is being stored along with, where that data is coming from and where it goes.
With a CDP compliance with GDPR regulations is simplified. You know what the data is and where it is being stored. This is very easy to keep track of in real-time.
DMPs and data privacy
DMPs, however, rely on third party data and this comes from sites and companies that collect this data and sell it. With GDPR regulations in mind, those data collectors will need the consumers permission, including consent to sell the data. With the massive impact of people now not wanting their data sold, this becomes a massive issue for the sellers as consent IS required. You also have to take into consideration that advertising channels, such as Google and Facebook, already have their own targeting tools to reach their own audience and customers.
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