CDP vs. DMP - How are they different? Which one to invest in?

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AN IDEASCOMPANYFORTHE DIGITALWORLD.
www.liqvd.asia
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CDP vs. DMP How are they different? Which one
to invest in?
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Background

• The customer data platform or CDP, and the data
  management platform or DMP, are often confusing.
  The situation is bound to happen since these
  platforms collect data for marketers.
• The primary difference between platforms is the
  kind of data it uses. A customer data platform is
  best used when data is collected from your
  website, mobile app, and similar platforms. On
  the other hand, a data management platform
  collects anonymized sets of data.

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Difference between CDP DMP

• There are three main differences between
  platforms, which we have listed below.
• CDPs collect 1st party data. In contrast, DMPs
  collect 2nd and 3rd party data.
• CDPs collect the personal data of the user,
  whereas DMPs collect anonymized data.
• CDPs retain data for a more extended period. On
  the other hand, DMPs maintain data for a shorter
  duration.
• Let us now understand each of these differences
  in detail to finally conclude regarding the
  platform to invest in, being a brand or a digital
  marketing agency handling a brand.

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CDP vs. DMP Data Usage
As said, CDPs use first-party data and a bit of
second-party data. In contrast, DMPs are famous
for using third-party data and a bit of
second-party data. If you wish to understand the
difference between these types of data, read it
through. 1st party data  This data is collected
by your company. The best example is when you
collect email addresses at the time when someone
subscribes to your website. 2nd party data  It
is 1st party data shared with non-competitive
partners. For example, if you decide to sell a
product specific to grocery, then partnering with
someone in the same field and collecting their
email list is a process where you collect the 2nd
party data. 3rd party data  This is the data
collected by the data collection companies and
then shared/purchased by someone who needs it.
For example, the data you use while running an ad
campaign on Google Display Networks is where you
use the 3rd party data.
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CDP vs. DMP Identifiable Information
CDPs use the information collected from 1st party
data sources like a subscription box, customer
satisfaction form, or contact form on your
website. We term this information as personally
identifiable information (PII). It includes
information like email addresses, contact
numbers, etc., which CDPs create detailed
personalized profiles. On the other hand, DMPs
use anonymized data based on the users behavior.
Suppose, if a user has traveled frequently in the
past three months, then such users are
categorized as a traveler. In such a case, if you
run a travel company, then such data will help
you target anonymous users interested in purchase.
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CDP vs. DMP Data Retention
CDPs usually keep the data stored longer than
DMP, which keeps data for a shorter
duration. Supposedly while running an e-commerce
website, you decide to reward all your frequent
users with some discounts at the end of the year.
In such a case, CDPs storing data will help you
categorize between normal users. On the other
hand, while running a travel agency, you want to
target audiences who traveled in the past 60
days, then DMPs will be useful for you since
users who traveled a year back will not help
you. Typically, CDPs can retain data as per the
limit you set. DMPs keep data for not more than
90 days.
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Conclusion
Use DMP when running ad campaigns for users
unfamiliar with you, as it uses 3rd party data.
It will give you an add-on advantage of targeting
new users. On the other hand, as a marketer, if
you plan to create a more personalized ad
campaign based on the data you have gathered,
then use CDP. However, brighter chances are that
you will use a combination of two while running
the ad campaigns. CDP will help you monitor and
categorize website visitors, whereas DMP will
help you tap unfamiliar users. Just ensure that
the data you collect is by using an ethical
legal way. We hope we satisfactorily answered
your query of which platform to invest in. In
case you still find it challenging, you
can connect with us for further understanding.
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magic_at_liqvd.asia
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