Over the years, data management has become a top priority for many industries. The search for the best way to manage user data started as early as the 1950s when industries began looking for ways to process large amounts of customer data.
With the development of Data Management Platforms (DMPs) and the transfer from local data storage to the cloud environment in the late 1990s, online industries, in particular, have incorporated DMP services to gather, store, and organize data to provide insights to marketers, publishers, and other businesses.
DMPs are often used by advertisers to improve targeting of online media campaigns and play an essential role in helping publishers optimize their inventories monetization. They have been especially appealing to businesses as they reduced in-house maintenance costs and increased flexibility, which was necessary considering business’s ever-changing needs.
DMPs became extremely popular as a tool that enabled online businesses to process an increasingly growing amount of user data and leverage it for marketing purposes and Selectmedia was one of the first movers to use this function with its different targeted campaigns, especially in Asia.
DMPs gather data from a vast range of sources such as company-owned channels like websites or email or third-party partners and provide many insights into anonymous user profiles, such as user behavior, geographical location, mobile identifiers, and cookie IDs.
Businesses can use the collected data to target audiences and monitor the success of their online advertising campaigns.
Although DMPs are a big part of the online industry, in the past few years, we are witnessing a change that may put in question the advantages and relevancy of this type of data collecting software in the future.
The increased awareness of user privacy has led to crucial changes in the online industry, relating to new and strict policies that limit the information collected on online users. These days, the General Data Protection Regulation (GDPR) makes it harder for DMPs to obtain 3rd party data processed via cookies.
The changes in user privacy policies have created a demand for a new type of user data management software, causing Customer Data Platforms (CDPs) to become increasingly popular.
CDPs entered the marketing world in 2013. Despite similar software such as DMPs, already being used in the ad-tech industry, there was a growing demand for marketing software that could provide a single holistic view of a customer, which will provide more detailed and precise data. By 2016 CDP software experienced fast growth and became a very successful and desirable tool for marketers.
CDPs collect 1st, 2nd, and 3rd party data from different sources, including CRM systems. The ability to collect 1st party data enables CDPs to provide detailed and accurate information regarding online users, such as a user’s name, address, and phone number, as well as the user’s browser history information. The collected data can be stored indefinitely.
At first glance, CDPs can seem very similar to DMPs; both platforms collect audience data for marketing purposes. However, the difference between DMP and CDP lies in the type of data collected, which affects the way each platform can be used.
The bottom line is both DMPs and CDPs have their limitations and advantages. The best way to choose a data platform depends on the type of data and capabilities most beneficial to your business. As these two solutions are not competitive but rather complementary to each other, marketers should consider incorporating both DMPs and CDPs to get the best of both worlds. However, by the end of 2021, we will see the rise of CDPs taking over.
SelectMedia is a full-stack video SSP, outstream video, and display header bidding solution for publishers. We are always improving our technologies and are prepared to provide the right solutions for our clients. While using DMP, marketers get fuzzy and limited data on the users; using CDP delivers a holistic and detailed view of each individual.