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The first thing that many people notice when looking at the digital marketing Lumascape is the vast amount of platforms and vendors offered for programmatic media buying and data management. And while some of these platforms stay true to their core technology, lines are becoming blurred. As these companies begin to take on new shapes and forms, it’s important for prospective customers to understand some key differences between these platforms.
Data Management Platforms (DMPs) and Demand Side Platforms (DSPs) are two players in the Ad Tech ecosystem that have continually caused confusion among interested buyers in the space. Here, we are going to take an in-depth look at the DMP vs. DSP, specifically diving into their key differences and use cases so you can better understand which best fits into your data strategy.
A data management platform (DMP) is a unified and centralized technology platform used for collecting, organizing, and activating large sets of data from disparate sources. Data management platforms have risen to the forefront of media and advertising on both the buy- and sell-side, as a result of an increasing focus on the analysis and targeting of audiences across multiple platforms, devices and media channels. The DMP is built on five interconnected pillars: collection, unification, organization, activation, and analytics.
A DMP should have the ability to unify all different types of data within their one platform. The three types of data are first-, second-, and third-party, which are explained below:
Once data has been collected and organized within the DMP, they are a number of things a consumer can use to inform their business decisions moving forward. Any audience built within the DMP can be defined and analyzed using audience profile reporting. These analytics reports provide a 360 view of an audience, allowing clients to better contextualize the who, what, where, why and how of their target audiences or customer segments. Audience analytics offer powerful consumer insights for both publishers and marketers and should inform the overarching planning process.
DMPs also generally use advanced algorithms to identify additional lookalike audiences who are likely to perform with a publisher or marketers desired KPI. Lookalike modeling analyzes the behavioral attributes appended to a user’s profile to determine which attributes are most likely to predict a user’s actions. By understanding the user’s past engagements, lookalike models perform pattern matching to locate new profiles and increase your companies desired reach.
Watch this short video to learn more about DMPs:
A DSP, or demand-side platform, is a real-time bidding system that connects media buyers with data exchanges and supply-side platforms (SSPs) through a single interface. DSPs serve as the middleman between media buyers and publishers, providing a repository through which they can buy and sell ad inventory.
In the past, digital ad space was bought and sold directly between ad buyers and ad sellers. In some cases, this process proved to be expensive and unreliable, leaving buyers in a tough spot. DSPs were created to provide a much more streamlined and cost efficient process.
The basic functionality of the DSP is as follows: it allows for advertisers to buy impressions across a number of different publisher sites, all targeted to specific users based on key online behaviors and identifiers. DSPs facilitate the relationship between the publisher and advertisers, automatically deciding which impressions it makes most sense for an advertiser to buy. The impressions are then bid on through an automated process and the media buyer with the highest bid will received the impressions. This process takes place in real-time, just as quick as a page loads.
Many companies, including DSPs, have built the technology to offer DMP-light capabilities in order to claim to be a DMP. Vendors who do not sell a complete data management solution like Lotame DMP might instead sell a hybrid, which means a DSP with some basic data management functionality.
The media-buying capabilities of a hybrid DMP/DSP hinders their DMP capabilities to be constrained to only media buying. On the other hand, a standalone DMP, like the Lotame DMP, includes advanced functionality to support clients’ non-advertising data strategies (for example, content customization for publishers) in addition to their advertising strategies.
Whether you will choose a standalone DMP, a hybrid DMP/DSP, or a standalone DMP and DSP that you link together will depend on your personal preferences and needs as a company. Before you choose, you should read on to understand more about the fundamental differences between DMPs and DSPs and get a demo of the Lotame DMP to see if it provides everything you need.
You can use a DMP for a number of different reasons, ranging from:
DSPs, much like DMPs have the ability to collect data. However, many DSPs can only collect campaign level data, which limits their ability to collect robust first-party data. Through the use of a DMP, data can be collected from various disparate sources, including digital properties (websites, campaign landing pages, etc), offline properties (CRM, Set-Top Box, email data, etc), and media properties (display, search, social, video, etc).
DMPs, such as Lotame, have an export functionality to any media source you want. This activation step relies on the DMP having integrations and open APIs with other platforms, so that the audiences you build in the DMP can be seamlessly transported to DSPs, SSPs, and beyond. Because Lotame is media agnostic, your data is 100% portable, meaning you aren’t married to any particular channel.
The DSP business model really only supports those who are interested in buying media. If you are a publisher looking to sell media, then a DSP wouldn’t be the best fit for you. They are not typically a solution for managed targeted ad delivery on your media via your ad server.
DSPs were not built to be a data management platform. They were built to be a demand-side platform, which at its core is a platform advertisers and media buyers can use to buy media on an impression basis.
In comparison, DMPs are a technology that enables you to access and use your 1st-party, 2nd-party, and 3rd-party data, wherever and whenever you want, via data export functionality and tech-stack integrations. So, whether you use multiple DSPs or even export your data to another DMP, they give you the power to use your data however you wish.
Lotame’s core DNA is data management. Customization built into our processes and data collection techniques allow you to ingest different customer databases. Lotame is willing to invest in creating custom processes to support your needs. This might not be the case with DSPs where media brings in most of the revenue.
Many DMPs, much like Lotame, value and protects consumer data. Our DMP is used only to provide you with deep analytic insights, for the sole purpose of further optimizing the performance of your audience segments. Meanwhile, DSPs might use your data to improve the overall efficiency of their campaigns and media revenue across multiple clients.
Data management platforms are necessary because they offer publishers and marketers the ability to aggregate data from any source, make sense of that data, and use it for a multitude of applications, including audience targeted advertising, cross-screen messaging, and content personalization. And, demand side platforms are so important because they act as the control center that helps automate the buying of display, video, mobile and search ads for companies.
Lotame allows clients to accomplish both the data collection and organization and the data activation. With Lotame, you’ll get data portability as we allow you to take your data to and activate your data in every major DSP and exchange, including Google, AppNexus, the Trade Desk, Turn, TubeMogul, Videology, Tremor Media, Yahoo, DataXu, and more!
We know that data is a huge asset to you and your growing company, and we are here to help you collect, organize, segment, AND activate that data to reach your campaign goals.
Learn more about how a cross-device data management platform works: