Why you need both consumer data and data governance platforms

People have a funny quirk: we’re always trying to determine the “best” of something, whether it’s NBA players or data platforms. The truth is that most of the time we are not dealing with a zero-sum game. It’s often better for two similar services to join forces rather than compete. Lebron James and Steph Curry maybe on the same team? With Lebron’s playmaking and Steph’s shooting, they’d be unbeatable, right? This is the case with Consumer Data Platforms (CDPs) and Data Management Platforms (DMPs). They work in different but complementary ways. Together they are more powerful than they could be alone.

Let’s take a look at a side-by-side comparison of the two types of data platforms.

While this comparison can differentiate the two in ways that make one appear superior to the other, the most effective marketing strategies are characterized by a marriage of the two. They complement each other.

We all know that not all consumer data platforms are the same and that different CDPs can have vastly different feature sets. CDPs add value for marketers who want to see all of their customer data in one system, and for publishers who build their first-party record through a signup wall. However, not all users log into all sites (and if forced to do so, they may leave)! On the open web, an average publisher can only authenticate ~20% of their audience, which means ~80% of a publisher’s audience is blind to CDP, which limits scalability. There is no built-in mechanism to supplement authenticated data with anonymous data, so a DMP is a crucial asset.

CDPs collect signals but lack a method to classify users persons. A CDP can determine how often someone is on a site and what time they are on the site, but cannot provide an estimate of how many people are from specific people demographics visit the site, which is critical to buying and selling ad inventory. Again, DMP analytics are extremely useful, filling a gap that CDPs cannot.

On the other hand, why do DMPs need CDPs? Because in an increasingly privacy-centric world, the ability to collect, organize, and centralize first-party data at the customer level becomes more important than ever.

CDPs can pull data from DMPs and share information with them. Both systems work together to enrich customer profiles. By integrating a DMP with a CDP, a digital marketer can access first-party data to see what customers are doing outside of their interactions with a brand and figure out what they want in micro-moments.

In short, CDPs are fundamentally about that customers. DMPs are approximate audience. CDPs are about harnessing the power of known user-level informationDMPs are about harnessing the power of unknown, anonymized information. Data in tomorrow’s world will be driven by a set of identifiers spanning first, second and third party data, and whoever is best at integrating and stitching those identifiers together will deliver the most value.

Will these technologies evolve into new types of platforms or even combined offerings over time? Yes! We’re already seeing this as CDPs bring DMP-like capabilities in-house and vice versa. And we’re also seeing DMPs evolving into identity-centric audience management platforms. Regardless, publishers and marketers need to leverage both types of technologies together to solve their data use cases. Bring Steph and LeBron together as a team and you will be the true All-Star!

Shiv Gupta is Managing Partner of U of Digital.