It has never been more difficult to become fully informed of the different types of CDPs.
The confusion is somewhat explained by the fact that, while new types of CDPs continue to hatch, their functionalities and value propositions remain a bit unclear.
A Forbes Insights study found that 44% of marketing leaders believed in the power of CDPs in driving customer loyalty. So, it's not that the business world is unaware of CDPs, the potential, and the popular Single Customer View. The challenge is rather to find the best match for your business out of so many suitors.
To make this jungle a little easier to navigate, here is our definition of the three most common data platforms out there: CDP, DMP, and Data Lakes (also known as the DIY CDP). This distinction might help you compare all the candidates lined up and ready to win your customer's data heart.
First things first: If you want a more detailed run-down of CDP, you can get it right here. If you just want to cover the basics, read on...
OBS! Other look-a-like CDPs continue to hatch. Don't mistake this list to be exhaustive.
The CDP is recognized as the most complex and advanced of the three, and it is a system that orchestrates marketing and personalization efforts from one single interface.
Here, customer data based on behavioral, CRM, and transactional data are ingested into the platform to achieve a smarter segmentation process and advanced personalization capabilities.
A CDP is best defined by the quality of its functionalities – what does a CDP do best? The strengths and weaknesses range from unification logics, tracking, integration (both ingest and activation), and the ability to create dynamic audiences. It's also the strengths of these functionalities that vary between CDP vendors. Some are strongest in activation audiences, while others don't really exceed from collecting customer data.
Read about the 4 Key Benefits of a Customer Data Platform here
Depending on your chosen vendor, a CDP can be customized to your needs, so it can help you achieve whichever use case your organization has.
CDPs also vary immensely in overall technical demand, meaning that some CDPs are perfectly manageable for most marketing teams, while others are more technically taxing.
➡ Get the Complete Guide to Customer Data Platform here
In some ways, a DMP (Data Management Platform) is similar to a CDP but without the element of profile unification.
DMPs are closely tied to acquisition marketing, and they primarily use 2nd and 3rd party data to help marketers understand their audience to target their ads better. Facebook is a well-known example of a DMP: They collect data on their users and allow advertisers to use that data to target Facebook users with relevant content.
However, the platform cannot accept and store 1st party data, and it works almost exclusively with anonymous information like cookies, devices, and IP addresses. What's more, most DMPs create temporary profiles based on user data that is only retained for a couple of months tops. This makes the DMP able to develop a clear view of a specific audience, but it doesn't understand users on an individual level.
In contrast, a CDP collects much more detailed customer data, which can be used in many different arenas for advertising and e-mail marketing, website personalization tools, CRMs, and many more.