In the marketing context, the words ‘database’ and ‘data warehouse’ are often used interchangeably. However, as you’ll soon learn, the two concepts have a few fundamental differences.
But before we jump in, let’s quickly define both terms.
What is a marketing data warehouse?
A marketing data warehouse is a cloud-based solution for storing and analyzing all your historical marketing data. That typically entails data from a number of different sources, including your CRM, marketing automation platform, and web analytics tools. The big opportunity with marketing data warehouses is that you can store a virtually unlimited amount of data from an unlimited number of sources and quickly run complex queries.
Marketing data warehouses are perfect for performing in-depth analysis on historical data. Rather than having to manually pull data from your ad platforms, CRM, product back-end, marketing automation platform, and Google Analytics to find out which marketing channels generate customers with the the lowest acquisition cost or highest lifetime value, a data warehouse combines all this data and makes it easy for you to find the answers you’re looking for.
Popular marketing data warehouse solutions include Google BigQuery, Snowflake, Amazon Redshift, and Azure Synapse Analytics by Microsoft.
Psst! To learn more about marketing data warehouses, check out our ultimate guide to marketing data warehousing.
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What is a marketing database?
A marketing database is a system that typically stores only one kind of data and performs considerably lighter queries than a marketing data warehouse. For example, your CRM, Google Analytics, and the email lists stored in your marketing automation platform are great examples of individual marketing databases.
Marketing databases are perfect for quickly finding out answers to simple questions like ‘How many people have subscribed to our email newsletter?’, or ‘How many of our current customers have been with us for more than a year?’
To make matters even more complicated, data warehouses or databases are not to be confused with data lakes or data marts. In short, data lakes are typically large repositories of all enterprise data in its natural format. Data marts, on the other hand, are subsets of data in a data warehouse, typically dedicated to a specific department or business line.
Now that we’ve got the definitions out of the way, let’s look at the main differences between databases and marketing data warehouses.
What are the main differences between marketing data warehouses and databases?
There are five fundamental differences between marketing data warehouses and marketing databases:
1. The number of data sources
Databases typically store data from a single source, whereas data warehouses have no limitations when it comes to the number of data sources.
2. Data processing and the complexity of queries
Databases are designed for OLTP (online transaction processing), which means that they’re best suited for running simple day-to-day queries like real-time account balance, number of reservations, and inventory. Data warehouses, on the other hand, support OLAP (online analytical processing), which means that you can run much more complex queries based on historical data from multiple different data sources.
3. The number of users
Databases are often used for applications that can have thousands — or more — concurrent users. Data warehouses, on the other hand, can typically only handle a limited number of concurrent users, since the queries run through them are much more complex in nature.
Databases are typically structured as efficiently as possible with no duplicate data anywhere in order to speed up query response time. Data warehouses are less concerned with duplicate data, since speed is not as much of an issue in data warehousing.
5. The ability to store historical data
Because databases have to be able to run queries fast, they typically focus on containing real-time or near real-time data alone. This means that the data in a database has to be pruned regularly for the system to run properly. Data warehouses, on the other hand, can contain an unlimited amount of historical data, which makes them a much better solution for data analysis and reporting.
When should I start using a marketing data warehouse?
Since you’re probably already using several marketing databases like the ones that live in your CRM, your email marketing platform, and your web analytics tool, the question is: when should you start using a marketing data warehouse?
Here are three signs that your company might be ready to centralize marketing data in a data warehouse:
1. You often want to combine marketing data from different sources
If you need to blend data from different sources every once in a while, spreadsheets might be the right solution for you. After all, with Supermetrics for Google Sheets or Supermetrics for Excel, you can easily pull data from different sources without ever leaving your spreadsheet.
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However, if you keep finding yourself in a situation where you’d like to run complex multi-source queries, setting up a marketing data warehouse might be worth your while. Sure, designing your marketing data warehouse can take a while, but the insights you’ll get in return will likely more than make up for the time and effort.
2. You want to store more historical data than what your databases or spreadsheets can handle
In addition to the frequency at which you want to run complex queries, the other important consideration is whether or not your spreadsheets or databases can contain that much historical data without crashing, slowing down, or running out of cell space.
After all, as we mentioned earlier, for a database to run properly, historical data must be removed frequently.
If your spreadsheets and databases are no match to your desire to store historical data, a marketing data warehouse might come in handy.
3. Someone in your company knows (or is willing to learn) SQL
The unfortunate truth about data warehouses is that you won’t benefit from them much unless at least one of your coworkers can run queries using SQL.
But if your technical skills are up to par or you’re not afraid of getting your hands dirty, a marketing data warehouse might just be what you need.
The adoption of marketing data warehouses is rapidly increasing across enterprises, fast-growing SMBs (such as VanMoof and Supermetrics), and marketing agencies (including EPL Digital, Katté & Co, and Inseev Interactive).
Our guess is that within the next year or two, more and more companies will start transferring their data from marketing databases into more robust data warehouses. And when that happens, marketing data connectors like Supermetrics will come in handy.
Psst! If you’re not quite ready to start using a marketing data warehouse, you can get a free 14-day trial of any Supermetrics product and start moving your marketing data to Excel, Google Sheets, Data Studio, or the BI tool of your choice.