It is becoming increasingly important for marketers to be able to take better control of, and make better use of, their data. Yet many do not willingly take on the role of a data scientist, and the world of marketing technology’s insistence on confusing acronyms do not make matters any easier. What is the difference between a CDP and a DMP? Where does an SCV fit in? Do all these technologies work together? What about DSPs? Do marketers need all four in order to get the best use of their data? We understand the confusion.

Over recent years, brands have needed to tackle an explosion of inbound and outbound channels through which to communicate with their customers. These channels and engagements, understandably, generate huge amounts of data to be stored within their data systems.

The trouble is, most of the time these data systems are disparate and disconnected – meaning fragmented, duplicated records or unwanted time matching and preparing data manually between source systems. This wreaks havoc when trying to retain an accurate view of the relationship you have with your customers and ensure that campaigns hit the mark

What marketers need, for more relevant and targeted communications, is for all the data within these operational data systems to be matched, merged and deduplicated to form a ‘single source of the truth’ or ‘single customer view’, that can be used across all touchpoints. This job is performed by a Customer Data Platform (CDP), which blends data across disparate data sources into a single record for each customer, while maintaining the compliance and governance required when your marketing system uses Personally Identifiable Information (PII).

The CDP has another primary role: as the real-time data conduit to feed into your marketing systems. Effectively, creating a single customer view that can serve data in a suitable format to analysis, journey orchestration tools and online advertisement platforms.

A Customer Data Platform is also responsible for integrating the information your brand collects as first party cookies.

When a customer interacts with your website, a behavioral, factual and descriptive picture of a customer is built, based on their browsing and download history. These first party cookies are generated by a device (a PC, mobile, tablet, etc.) rather than a person. However, as one customer can use multiple devices and each device can create a unique first party cookie, the problem of fragmented customer data can reappear.

With a CDP, multiple first party cookies can be merged through authentication (such as when you log on to a service with an email). This attaches a device (or several devices) to a single person, allowing for a view suitable for analytics, targeting and segmentation, as well as real-time website personalization.

Third party cookies, on the other hand, are created by companies your brand has a relationship with. Third party cookies track the behavior of customers across many websites, with many other organizations. Essentially, creating a far bigger group of data, of all the behaviors, of all people across the internet. This data can be put to marketing use by a Data Management Platform (DMP): a central data repository for third party cookie information and first party data.

One of the key differences between a CDP and a DMP is that a DMP can be used to target and acquire customers with messages outside of your existing customer database. For example, after collecting device browsing behavior, a DMP can identify others exhibiting similar browsing behavior, for similar products.

These people can then be segmented as part of your target audience, with a tailored advertising creative aimed at them. Through a demand-side platform (DSP), marketers can then upload the creative, advert or message and the DSP will place it on the relevant devices of the most appropriate consumers, on the most relevant websites.

The main appeal of a DMP is their massive audience reach, bringing together third party data from a wide number of places and creating an environment where digital advertisers can hyper-target their customers (and other peoples’ customers) for acquisition, up-sell and cross-sell strategies.

However, one important thing to note is that a DMP cannot legally use or share PII – that is, data that can be used to identify an individual (such as an email address). A DMP can target a person based on how they behave and what they’ve bought. But not through who they are. So, an advert can be sent to a device Jeff has used to search the internet – not Jeff himself.

To summarize:

• A CDP can use both first and third party data. This data is unified from internal and external systems, cleaned, governed and turned into a single, compliant, trustworthy record. It’s your central customer data hub, sharing knowledge, activity and behavior to all your internal and external marketing systems to underpin selection, segmentation, targeting, marketing automation, metrics, modelling and more. A CDP can use anonymous data, but mainly focuses on PII for the creation of targeted, personalized communications.

• A DMP’s primary goal is to facilitate hyper-targeted digital advertising – placing relevant creative content on the other websites a customer uses. It uniquely identifies every devices using a cookie, aggregating first and third party data to reveal massive audiences to you. But it does not identify the individual and it cannot personalize every single experience because the PII can’t be shared.

As this (hopefully) explains, a CDP and a DMP might initially sound like they do a similar thing, but they are more like different sides to the same coin. You could say that a CDP lets you talk to the customers you know by name, while a DMP lets you share a message with those you don’t.

Does that mean you need both? You could easily argue yes. Do you need one over the other? That depends who you want a relationship with, and how you want to shape it.

Finally, while we’re demystifying acronyms, I’d also point out the more recent references to the ‘Golden Record’ or ‘Unified Profile’, which are both born out of the fact that marketers need to account for the growing variety of data from digital sources. Anonymous data, cookies and device information are of growing importance, as we’ve just looked at, and so these new terms are more holistic ways to describe the Single Customer View. But essentially, we’re talking about the same thing!