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

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.

CDP vs. DMP – Data Usage

1. 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.

   1. 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.
   2. 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.
   3. 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.

CDP vs. DMP – Identifiable Information

1. 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 user’s 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.

To know about more differences, visit the blog page of Liqvd Asia.