As the amount of data that consumers generate grows, so does the potential to use it to advance your company goals. Virtually every online action customers take produces data that can be used to inform marketing strategies, increase engagement, and improve your bottom line. To unlock the benefits this data can provide, however, you must be able to organize and analyze it to extract valuable insights. That’s where data management platforms, or DMPs, come in.
Marketers, publishers and agencies need to sort, organize and make sense of the endless streams of data they collect. One of the biggest benefits of a data management platform is that these systems provide organizations and teams the necessary resources to make sense of the data they have.
In its most simplistic form, a DMP is a data warehouse hosted in the cloud. As soon as a business starts working with a DMP, it begins collecting, sorting and storing any and all information it’s connected to. Then, it takes that data and translates it into a more useful form — showing trends, insights and statistics. Ultimately, this allows marketers, publishers and agencies to turn these insights into actions, and use them to inform their marketing campaigns.
In the marketing world, DMPs are most commonly associated with audience targeting. For example, the collected data might provide a marketing team with information that helps them target a specific user base or demographic through online ads. But in fact DMPs have many applications beyond sending targeted messaging to individual audiences.
The use of DMPs is widespread. A study by Lotame and ExchangeWire found 79 percent of agency-side media buying professionals use a DMP, a 49 percent increase from 2015’s numbers.
There’s a good reason for the popularity of these solutions. They have many tangible benefits, which we’ll discuss below.
Data Management Platform Benefits
Let’s start with an example. A fictional marketing company, Ads United, is running a campaign that seeks to convert new customers for one of their clients, a landscaping company. They’re running ads, but they’re not sure they’re reaching the right people. They also want to cut down on costs by cutting ads targeted to people who aren’t likely to convert. How can they make their ad distribution more accurate and efficient?
The answer is data. Plenty of data on current and potential customers already exists. The company just needs to collect it, organize it, analyze it and turn it into useful insights. This is no easy task, but is much more doable when using a DMP.
Ads United could use a DMP to organize data from its interactions with customers, anywhere from social media and email to mobile or website visits and much more. They can then use that data to determine which ads are reaching their target audience. They can also define their ideal audience using demographic information such as age, marital status, income, location and whether or not they’re homeowners.
What You Miss Out On Without a DMP
The benefits of using a DMP vary depending on your industry and your goals in using the technology. But any business that could benefit from using data — which is nearly every business — could benefit from a DMP. With that in mind, here are some of the most common key benefits you could be missing out on if you’re not taking advantage of this technology.
1. Increased Revenue
Perhaps the most enticing benefit of using is a DMP is the increase in revenue it can lead to. Using one of these systems enables you to more accurately target your ads to the right audience, which results in higher response rates, increased brand recognition and, ultimately, higher conversion rates. For a marketer, increased conversion rates generally means more sales of your products and services, which leads to higher revenue.
A DMP also provides you with a better sense of direction when choosing proper placement for ads and promotional materials, increasing your return on investment for your marketing spending. For a publisher with valuable first-party data, you can also use a DMP to sell that data to other advertisers, opening up a new revenue stream.
Our fictional company, Ads United, could use their DMP to determine which audiences and demographics are converting more often than others. This would allow them to prioritize their advertising budget toward a wider audience, or a similar, look-alike audience, that would have a higher chance of converting compared to non-performing audiences. This prioritization could decrease their overall cost per lead and increase their revenue by bringing on more customer for less money.
2. Streamlined Data
As a marketer, you are likely collecting lots of data from a variety of sources. Some of the more common channels include email, e-commerce, social media, mobile apps and customer loyalty programs.
DMPs collect all that data and conveniently store it in one place, so you have one cohesive view of your customers across screens and platforms. DMPs will process, organize and prepare your information, offering a much clearer picture and a better understanding of your audience, strategies and efforts.
Having all your data organized in one place means your teams can The result is the option to make more informed business decisions across all aspects of your company.
Our fictional Ads United team would gain access to a central system that organizes all of the company’s data. This would enable them to see the larger picture and have a clear understanding of what’s working for them and what’s not. This will cut down on time the company needs to spend combing through their data.
One of the marketing benefits of a DMP is that it gives you complete control over all your data and allows you to import new data, as well. Whether you want to store it for later, use it immediately or share it with partners, you have all the tools you need.
3. Optimized Cross-Device Campaign Management
Your ad campaign likely won’t only reach customers on one type of device, unless you target it that way. Chances are, people will view it on Apple and Android devices, Macs, PCs and maybe even TVs. You need to be able to view insights from all these types of devices.
DMPs offering cross-device technology can match the profiles of your target audience across screens, so you can reach the right people at the right time on the right screen. Not only can your potential customers have a cohesive brand experience on any screen, but you are also able to gather more information about these consumers across devices.
[bctt tweet=”DMPs offering cross-device technology can match the profiles of your target audience across screens, so you can reach the right people at the right time on the right screen.” username=”Lotame”]
For example, if Ads United discovered their audience was clicking on ads more often on mobile than on their computers, they could reduce the resources they allocate to desktop and focus more on mobile advertisements. DMPs allow marketers and agencies to reach the right person at the right time, no matter which screen they are on, to increase engagement and ROI.
4. A Leaner Budget
With a data management platform, there is no longer a need to “spray and pray” with your advertising — meaning sending the same message EVERYWHERE and hoping it hits the people you are interested in. Instead, you can build audiences to retarget people who have visited your site and purchased your products previously, or try to get the consumers who abandoned products in their shopping carts on your site to come back and finish their purchase. The bottom line is that you can choose who sees your advertising and only focus on the most important audience. Overall, this means reduced ad waste and likely a leaner marketing budget overall.
Our fictional marketing team at Ads United, for instance, could easily determine the customers their ad money is best spent on by using a DMP. This would allow them to cut out ads that are reaching current customers or employees as well as customers that demographic analysis says aren’t likely to convert, such as those who don’t own their homes. Cutting out the ineffective ads will make their budget leaner and help improve their bottom line.
5. New Target Customers and Audiences
When selling a particular product or service, the goal is often to find more customers. But this is easier said than done. How can you effectively find more potential customers similar to the ones who are already brand loyalists?
[bctt tweet=”DMP data can open you up to new audiences and customers via audience extension and look-alike modeling.” username=”Lotame”]
DMP data can open you up to new audiences and customers via audience extension and look-alike modeling. Audience extension is a method of adding on 3rd party data onto your existing audience, in order to find additional customers across the internet. For marketers without a lot of first-party data, audience extension is key to growing the size of your target audience. Lookalike modeling is another option that relies on machine learning to find new possible customers most likely to interact with your customers. All you have to do is provide your “seed” audience of your ideal customers or target, and the algorithm does the dirty work, to grow your target audience size.
No matter what your method, DMPs can help you find more of the best customers you didn’t even know you had!
If Ads United needs to expand their client’s customer base, they could use either audience extension or lookalike modeling (or both) to find additional consumers in nearby neighborhoods that are underserved in the landscaping department. They can then use the larger pools of audience data to send targeted messaging with a special offer to those people.
6. Meeting the Needs of Your Customer Base
You can’t always have a one-on-one relationship with all of your customers, but you can get to know them better with the right amount of data, organized in a digestible way. For example, you can learn which of your products and services they value most. Or ou can learn how they react to various promotions and marketing materials, and what resonates with them most and drives the most sales.
You can also use your data, such as your search results, social media likes and surveys, to predict what new products or services your customers might want. Ads United, for example, could discover that the landscaping company’s customers would also pay to have the outside of their homes power-washed, a service the landscaper might be able to offer.
7. Accessing Second- and Third-Party Data
One of the benefits of DMPs is the ability to integrate first-, second- and third-party data into one system. For marketers looking for high-quality sources of data beyond what they already have, second- and third-party data are necessary to increasing audience sizes. Many DMPs offer third-party data from trusted data companies for purchase inside the platform, so you can add the data directly into the audiences you are building. Second-party data marketplaces like Lotame Syndicate are also popping up, offering a new way to buy data directly from other companies, rather than via a data exchange.
8. Continuous Learning
DMPs aren’t just solutions to short-term problems, although they’re great for that. They also help agencies build out their long-term strategies. Companies can use them to solve immediate problems, such as advertising spending that’s too high or promotional content that isn’t reaching the right audience. But they can also use the information they gather from those uses to help them reach their long-term goals.
Every time a company successfully optimizes a campaign using their DMP, they can apply what they learned to future campaigns. The more they learn, the better their future campaigns will be. They’ll be successful more quickly, too, and will require fewer adjustments. This consistent progress can help the company reach its long-term growth goals.
[bctt tweet=”Every time a company successfully optimizes a campaign using their DMP, they can apply what they learned to future campaigns.” username=”Lotame”]
So, What Are You Missing out On without a DMP?
The short answer to this question is an easier way to implement efficient, lean and streamlined processes and marketing strategies. If you aren’t currently using a DMP, you’re missing out on the many benefits that could increase your sales and improve your bottom line.
Of course, now you’re close to embarking on the next portion of your journey — choosing a DMP that fits your needs. Lotame has evolved its DMP far past the capabilities publishers and marketers associate with the acronym. We believe connected, consented data is the key to a cookieless world. Guided by that North Star, our continuous commitment to innovation enables us to offer the benefits of a traditional DMP plus much more, including the ability to connect first-party audiences across browsers, devices, and platforms. Our identity-powered Audience Management solution future-proofs data connectivity today, and in a post-cookie world.
By tapping into our technology, marketers, agencies, publishers, and platforms can continue to onboard, enrich and address audiences in a privacy-compliant way, even as third-party cookies are phased out. Request a demo of our data connectivity solutions today, including Audience Management, to learn how you can start growing yield, increase performance, and respect consumer choices.