A Primer On Data Management Platforms
In programmatic ad buying, advertisers are able to run their campaigns through ad networks, ad exchanges, and demand-side platforms (DSPs). A data management platform (DMP) plays an important role in that it helps marketers unify performance and audience data from multiple sources. Advertisers, agencies and publishers need the right tool to help them manage these critical audience data assets—and a DMP is that tool.
It helps marketers answer these key questions about their customers:
- What attributes define them?
- Which exact products are they currently looking to buy?
- What are they likely to buy next?
- How do you reach more of those customers?
How does a DMP work?
A DMP stores and analyses data, while a DSP uses this data to buy advertising. A DMP is similar to a data warehouse that stores information from multiple sources. It enables advertisers and agencies to take control of their own first-party audience and campaign data, compare it to third-party audience data, to make smart media buying and campaign planning decisions. First-party data is essentially data generated by your company on its owned platforms. Second-party data is another company’s first-party data. Third-party data is typically data aggregated from a multitude of sources.
Why use a DMP?
A DMP acts like a central location for marketers to access and manage data to help them create audience targeting segments for their display, search, video and social campaigns. Marketers can then extract and analyze all this data to get a complete view of how campaigns perform against a specific target audience. A DMP informs a DSP’s ad buying decision. A DMP passes audience segment data to the DSP for ad targeting. Advertisers build audience segments based on criteria such as demographics, past browsing behavior, location, household income, etc. using a DMP, which then analyses which segments have performed. It feeds the results back to the DSP, which then enables advertisers to continually optimize their campaigns to reach those audience segments that perform best.
Benefits of a DMP
A DMP solves some of a marketer’s most pressing challenges.
- As opposed to a spreadsheet, it helps marketers or agency account managers manage all of their online advertising campaigns from one dashboard—from audience profiling, media buying and targeting to optimization and reporting.
- It pushes advertisers and agencies to take a data-driven approach to marketing and campaign management to help boost ROI.
- While some companies say it’s easier and more efficient to use an integrated DMP and DSP platform, some believe that standalone DMPs make data more portable. This makes it easier for a DMP to feed data into a wide range of DSPs. MediaMath is an example of a DSP that offers DMP technology as well.
- A growing number of publishers are also using DMPs as a way to help them better understand their audience information and extract more value from it.
DMPs are definitely not a one-size-fits-all solution. They have to be chosen and implemented in a customized manner by each company. It’s vital for publishers, brands and agencies to ensure they have the right knowledge and systems in place for their DMP to realize its full potential.
DMPs are, undoubtedly, a key component of the data-driven marketing landscape. Think about it. Without the technology available at their disposal to manage and measure huge quantities of data, brands will be unable to harness the potential of large-scale data-driven marketing to reach their most valuable customers.