The world of data collection can be confusing – we've got more acronyms than you can shake a stick at. It seems like every day a new tool or category emerges. While everything seems to be changing and evolving at a breakneck pace, it's important to understand what's stayed the same.

One constant in digital analytics is the need for reliable, accurate customer data. 

The emergence of Customer Data Platforms (CDPs) in the past few years has been a boon to an industry desperate to consolidate customer data into a single centralized platform. However, the CDP has muddied the waters on the role of other tools such as CDI (customer data infrastructure) and DMP (data management platform). All 3 types of platforms are important to the modern data stack but each has its own role (learn more here CDP vs. DMP vs. CDI).

When it comes to CDPs and tag managers, it can be even more confusing. This is in part due to vendors like Segment moving from the tag management and CDI category firmly into the CDP category.

In this article, we're going to clear up the differences between CDPs and tag managers.

Understanding Tag Managers

Tag managers have been a mainstay in digital analytics since Google introduced Google Tag Manager in 2012. Tag managers help teams to collect customer and event data from websites and apps to make it available to other teams and systems. For example, tag managers have been used to send event data like online purchases to advertisers. This helps marketing teams to track conversions and determine return on ad spend. 

Traditional tag managers operate on the client side and use JavaScript to collect data directly from the user's browser. Client-side solutions were a boon to digital marketers who would often be frustrated waiting for development to deploy new scripts and tags. With client-side solutions, marketers could deploy tags instantly (once the tag manager code was loaded on the website) and start tracking whatever they wanted.

One of the benefits of tag managers is their ability to integrate with other tools and systems. As mentioned, the ability to send conversion data from your website to an advertising platform is critical for measuring the effectiveness of your digital advertising programs. You can also integrate with your marketing automation, web analytics, and, of course, your CDP.

Tag managers are essential for capturing first-party data gleaned from how your customers interact with your website. However, this is becoming increasingly challenging for client-side solutions because of ad blockers, the deprecation of third-party cookies, and data privacy regulations like GDPR and CCPA. 

These trends all coincide and contribute to the rise of CDPs. The challenges in data collection – from privacy to technology – have created the need for a modern approach to data management. That's where the CDP comes in.

Exploring Customer Data Platforms (CDPs)

A Customer Data Platform (CDP) is software that creates a centralized, unified customer database that is accessible to other systems. Data in your CDP is pulled from multiple sources such as your CRM, marketing automation platform, offline sources, and website to create a single customer profile.

The rise of the CDP comes from two parallel developments in data technology. First, regulatory requirements like GDPR, CCPA, and others mean businesses competing internationally need to adhere to a high standard of data privacy measures. Second, technological challenges such as the explosion of marketing tools means that customer data is fragmented across multiple data silos.

CDPs address both concerns by creating a single source of truth from multiple sources to create that venerable unified customer database. The other key element of CDPs is that they must integrate across the data stack – this is essential for making all your data and marketing machinery work together. Customer data, like communication preferences, need to be respected across channels; CDPs can enhance customer experience across multiple channels, if deployed effectively. 

One of the most challenging use cases CDPs tackle is data transformation. Let's consider a common problem: your customer's first name. If you're a retailer you may have collected and stored data about a customer across multiple channels, such as your ecommerce store, online newsletter, and even your brick-and-mortar store. Each time that data is collected, it will go into the system that collects that data.

Those disparate systems may call the first name property something slightly different like firstName, first_name, or FirstName. Lining up these properties so you know that this is the same person across all three instances can be surprisingly tricky, especially when you scale this up to dozens of systems and hundreds of properties.

CDPs do the heavy work of transforming this data into a single unified field and making sure all other systems get the right data to their respective properties. This type of data transformation and normalization is a challenge that has plagued marketers for a generation. 

Comparing CDPs and Tag Managers

It might be clear at this point that CDPs and tag managers are complementary tools. A CDP acts as the unified, centralized single source of truth for customer data; a tag manager acts as a data collection mechanism for web properties, mobile apps, and SaaS products. 

Let's break out the differences between these two technologies to fully understand the difference. Here's what we'll cover:

• Data collection methods
• Integration and interoperability
• Data quality and governance
• Audience segmentation and personalization
• Technological adaptations 

Data collection methods

This is where the most confusion occurs between CDPs and tag managers. It's true both collect data, the scope of data collected is quite different. Tag managers focus on web and app-based interactions, tracking events, session data, and attribution information. Some CDPs are capable of collecting some of this information, they are not typically built for this purpose. 

It's worth noting that CDPs and client-side tag management systems both have a weakness: they rely on 3rd party scripts to collect data in the browser. This means they are likely to get blocked by browser restrictions. Server-side tag managers, like MetaRouter, collect web and app-data using 1st party scripts to ensure rock-solid compliance and minimal data loss that often comes with processing data in the browser.

CDPs aggregate data across the entire marketing and sales ecosystem. Tag managers collect data on web and app data and send that data to your CDP. 

Integration and interoperability

Tag management systems were initially developed to help distribute data from your website to other sources, like advertising platforms or your web analytics tool. They are inherently highly interoperable – meaning that they work well with a large number of platforms. If you want an example of this flexibility, check out MetaRouter's list of integration and note the different technologies we're compatible with.

Naturally, the promise of a CDP is that it integrates with all your business tools and processes. However, CDPs involve a more complex setup process as they involve data mapping, understanding the data architecture of other systems, and collaborating with all teams involved like marketing, IT, sales, and data teams. 

The end game for both systems is a robust, highly interoperable data system. Tag managers are an additional data source to integrate with your CDP, and your CDP requires extensive set up to reach its full potential. 

Data quality and governance

CDPs are designed with robust mechanisms to ensure high quality data ingestion across various data sources. Afterall, this is one of the key problems that CDPs solve. When it comes to tag managers, the data quality and governance can vary depending on whether you're using a client-side or server-side tag management solution.

For both types, you are handling data collection from digital properties like websites and apps, so the precision of the data collected depends on the set up. For traditional client-side solutions, they are susceptible to issues such as script blocking by browsers or disruptions caused by user settings, such as ad blockers.

Server-side tag managers take more planning and effort to set up than client-side solutions, but the payoff is well worth it. Server-side solutions can address challenges in data quality by providing a first-party method of data collection. Because data is handled on the server, you can set up data controls and quality checks before distributing it to additional systems, like your CDP.

Audience segmentation and personalization

CDPs are designed for advanced segmentation by utilizing data collected from multiple sources. Tag managers provide an instrumental data point for these types of activities by collecting data on how users interact with your website. This pseudo-anonymous data is an essential component of real-time personalization strategies that leverage the capabilities of CDPs to maximize your marketing efforts.

In this regard, CDPs and tag managers are highly synergistic – they both provide key data points, and work far better together than they do separately. Web data provides deep insight into customer behavior, and your CDP can use this information with other sources to create a holistic view of your customer. This is the exact type of use case which makes CDPs so promising – but without a robust tag management system you'll be stuck scratching the surface instead of providing robust customer experiences.

Technological adaptations 

Both CDPs and tag manager technologies are highly adaptive to changing requirements. Client-side tag managers are more sluggish in this regard as they are limited by the data that can be collected by browser policies (such as the deprecation of third-party cookies). Server-side tag managers are robust systems that can match the agility of CDPs and respond to new requirements.

For instance, if you need to comply with new legislation, combining the data in your CDP with a server-side tag manager, you can quickly implement new consent management preferences. You could implement tags in your server-side tool (such as MetaRouter) to trigger a consent popup based on the consent status stored in your CDP. In real-time, users can select which analytics scripts they will allow, and you can precisely control and enforce this. 

Better together: Server-side tag managers and CDPs

Server-side tag managers and CDPs are complementary technologies that work together to complete the full view of the customer. Some CDPs offer client-side tracking options for web and event data – and while this may work at a smaller scale, the best way to future-proof your setup is to deploy a server-side tool.

Client-side tag managers are vulnerable to browser restrictions, JavaScript blockers, and can dramatically impede the experience on your website through increased page load times. Server-side solutions, on the other hand, work very well with CDP setups. If you have the resources internally to set up a CDP, you have the resources required to set up a server-side tag manager to future-proof data collection on your web properties.

This approach is a smart one. Server-side tools work extremely well with CDPs owing to the fact that data is processed on the server before being distributed. This means you can fine tune your data payload from server-side tools before sending it to your CDPs resulting with data that is clean and useful by default. 

Server-side tag managers are a CDPs best friend. They enhance data collection from web properties, provide a direct data pipeline from your website, and can enable real-time personalization at scale. This is a winning combination for future-proofing your marketing technology and data stack.

Ready to experience the server-side difference? Book a demo and see MetaRouter in action today.

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