Tag managers and CDPs: What’s the difference?
Both tag managers and CDPs help marketers collect customer data without relying on engineering, but that's where the similarity ends.
In the dimly lit room that often is emerging technology categories, tag managers and customer data platforms can be easily confused. Both make it easier for non-technical marketers to collect and action data across multiple vendor partners. Even more confusingly, several of the leading tag management providers now also claim to offer CDP capabilities.
This guide will provide you with an understanding of what a CDP is, what it can do, and how it compares to a tag management system so you can make the best choice for your business.
What is a tag manager?
Besides this automation, tag managers provide robust integrations to adtech and analytics services, so brands are able to better track their data and use it to influence advertising strategy. Because tag managers rely on tags fired as a result of customer actions, they can also provide limited identity resolution and data mapping onto users from on- and offline data. This is limited by the source of the customer data, with mobile being hit or miss depending on the device used.
What a tag manager isn’t
For all the benefits tag managers have been able to provide marketers for the past decade, they can’t seem to keep up with modern data demands, like identity resolution. Tag managers aren’t an identity resolution solution. Because tag managers rely on tags fired as a result of customer actions, they can provide only limited identity resolution and data mapping onto users from on- and offline data. This is limited by the source of the customer data, with mobile being hit or miss depending on the device used.
Tag managers aren’t a comprehensive data collection solution. Tag managers manage tags, which are designed to be web-based and ephemeral. As consumers have shifted towards relying on their mobile devices to browse and shop, brands have found that many of these devices don’t accept web-first tags. For brands, that means having a mobile-sized blindspot, which just can’t be ignored.
If these devices do accept tags, the problem becomes their ephemerality. Brands have come to realize that customer acquisition costs are by and large much greater than retention costs, so it pays to know your customer and be able to anticipate their needs. Tags have an expiration date, so customer histories and preferences aren’t available to brands for the long-term leading to missed opportunities to convert one-off customers into loyal, high-value customers. Add that to the fact that these tags often still have to be manually implemented and it suddenly represents a large waste of opportunity and resources.
What can’t a tag manager do?
CDPs provide marketers with a single platform from which to manage all of their customer data, regardless of the source. Marketers can rely on CDPs to streamline customer data management, resolve customer identity, collect data in real-time, translate and orchestrate data, and provide increased data governance and security.
Customers now interact with brands across multiple channels and devices—they change emails, share devices, log in and out, and delete apps and cookies. CDPs are designed to collect and match data to create a unified, 360-degree view of the customer with improved data governance, policy, and security.
Data translation and orchestration
One of the challenges marketers are facing is incompatibility between the services and platforms being used to collect and share customer data. Data naming systems vary to the point that each tool in a marketing stack may have a different naming convention, making it near-impossible to wade through the data for significant insights. CDPs are able to transform and piece together data from different systems across a data stack to create a single view of the customer regardless of incompatibility between your systems.
Real-time source of truth for mobile and web
Winning across digital channels is hugely dependent on how quickly marketers are able to react to customer actions and anticipate a customer’s needs. CDPs use real-time APIs to collect real-time data across the entire customer lifecycle to create comprehensive cross-device customer profiles that can then be forwarded to the services and platforms in your stack so you can take action.
CDPs’ advanced audience segmentation features enable you to define audiences from user data. Audience segments can be as broad or as specific as you need and can be defined by hyper-specific characteristics and actions like shopping cart abandonment, app installs and crashes, and lifetime value, among others. You can then share these segments to target customers through email vendors, ad platforms, social media, and beyond to increase user acquisition and retention and conversions.
Data governance and security
Because CDPs are able to capture highly sensitive personally identifying information (PII), the level of data governance and security provided is incredibly important. Fortunately, CDPs are uniquely positioned to handle privacy thanks to their place in the marketing stack and the best CDPs are built with privacy in mind; user data collected by CDPs is never stored with other data to maintain pristine data privacy standards. The best CDPs have gone far beyond their privacy-by-design roots and provide marketers and customers with granular control over their data, secure it end-to-end, and manage identity with custom rules. Maintaining customer data privacy is set to become even more important as new, increasingly stringent regulations are put into place, like the GDPR set to debut later this May.
How do you choose a CDP?
Just because something is calling itself a CDP does not necessarily mean that it has all of the capabilities of a CDP. As the term “CDP” becomes increasingly popular, more systems are adopting the name without being able to meet the competencies and capabilities of a true CDP.
A CDP needs to be able to deliver high-quality web and mobile data to your external systems. The right CDP should consistently and reliably provide you with data cleansing and standardization, data enhancement, cross-device matching, advanced identity resolution, and state-of-the-art data security and governance.
Data cleansing and standardization
Dirty or inconsistent data muddies the waters rather than help improve insight, so a CDP needs to be able to cleanse and standardize your customer data. Data cleansing may include removing characters, data elements, or entire records to isolate and highlight significant information. Ideally, the data cleansing rules should be customizable and enforceable.
Similarly, data standardization adjusts for inconsistencies caused by data entry errors, lack of entry standards, and inconsistent standards in different systems.
This refers to adding data related to the contents of input records. Typical examples are appending demographic data (age, income, interests, etc.) to individual data or company information (revenue, number of employees, industry, corporate parent, etc.) to business data.
Cross-device matching links an identified device to all related devices to create a better individual customer profile. Some cross-device matching is based on conventional chaining techniques: e.g., if the same customer logs into their account on two different devices, those devices are both linked to the customer and, via chaining, to each other. Other device linking is based on “probabilistic” methods, in particular identifying devices that are repeatedly used at the same time and place.
A persistent ID is a permanent ID assigned to an individual, which can be retained despite changes in identifying information including mailing address, web cookies, and device IDs. Persistent IDs are especially important in tracking the history of a customer over time since they create links even when the original identifier on the data may no longer match the current identifier. This also includes being able to discern users sharing devices or a single user using several devices.
Advanced data privacy compliance
As mentioned, the GDPR is set to be enforced in May, which has brands carefully reconsidering their standards and practices for managing customer data. This is especially important because the granularity of PII collected by modern tools makes it even more sensitive. Under the GDPR, every individual has the right to data access, portability, erasure, and more. Many businesses are not equipped to honor those rights mainly because customer data is kept in different places for different purposes and sometimes managed by separate teams.
When it comes down to it, customer data is complicated enough that it doesn’t necessarily have to be a case of choosing one or the other. We know that marketing needs are unique to every business and so mParticle can function on its own, or work to fill the holes left in customer data management by tag management systems. Where a Tag Manager’s primary business is managing pixels and tags on web, for us, it’s more about ingesting web and mobile behavioral data to enrich user profiles for better personalization through advanced identity resolution and audience segmentation capabilities. mParticle’s API collects data from your entire martech stack, across all channels, devices, and apps, for real-time insight into your customers. This data can be transformed, enriched, segmented, and then shared to email marketing platforms, BI tools, push platforms, ad platforms, and more to reach the right customers in the right way with the right content at the right time.
Besides offering all of the security, stability, and reliability of a CDP, mParticle enables you to streamline your web and mobile data management into a single platform rather than using various disparate tools. You can then use this more complete user profile to build highly-specific audiences and campaigns to help you reach the right person with the right content at the right time while maintaining customer privacy and consent standards. In anticipation of the GDPR, mParticle has launched a series of new features to help brands support GDPR compliance and has committed to the OpenGDPR standard, which provides common specifications for brands and vendors to programmatically communicate GDPR requests across your entire marketing ecosystem.
With mParticle, marketers have access to a 360-degree view of the customer and a better understanding of their journey across all touchpoints, so they can target customers with content that will resonate, all while ensuring that their customers’ data privacy and data rights are upheld. If you’d like to learn more about how mParticle’s capabilities can help you increase marketing efficacy, reduce friction across your systems, and help you comply with the latest data privacy standards, feel free to reach out!
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