Data Management Platforms (DMPs) are digital tools used by businesses to collect, store, and analyze customer data. This data is then used to inform marketing and business decisions. DMPs can collect data from a variety of sources, such as customer demographics, purchasing history, website clicks, and online registration forms. This data is then segmented to build specific campaign audiences by using data points, such as family size, household income, and age ranges. DMPs also have reporting features for analyzing customer data, and to gain an understanding of customer behavior.
In comparison to DMPs, Customer Data Platforms (CDPs) are also used to collect and store customer data, however CDPs generally only use first-party data and collect personal identifiable information (PII). CDPs are able to connect data points gathered back to individual users, providing a better knowledge of customers and their behaviors.
Data protection laws, such as the EU’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), protect customers’ data and define guidelines for businesses that use or share it. Consumers are more aware of online privacy issues and expect transparency about how their data is used.
The future of data management platforms is uncertain due to Google’s plan to phase out third-party cookies in the second half of 2024. This will mean that DMPs have to gather customer information from different sources. As a result, some believe that DMPs are becoming redundant and marketers are shifting to CDPs. However, DMPs may evolve in the future, with a focus on first-party data and building customer experiences.
Understanding the importance of data management platforms and the evolution of data privacy is essential for businesses to ensure their marketing campaigns are effective and in compliance with data protection laws.
Originally reported by Martech: https://martech.org/why-we-care-about-data-management-platforms/
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