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What is a Data Management Platform (DMP)?

May 22, 2018

what is a data management platform

As digital media grows more complex and more user data is created and collected on a daily basis, marketers, agencies and publishers need better ways to buy, sell and manage audience data beyond the standard suite of analytics tools. How do you capture all this valuable audience data, shape it into insights and then activate it to drive outcomes?

What is a DMP?

A DMP is the backbone of data-driven marketing and serves as a unifying platform to collect, organize and activate first-, second- and third-party audience data from any source, including online, offline, mobile, and beyond.

dmp definition

While big data is instrumental to effective data-driven marketing campaigns, you can’t do much with the raw information. You need it sorted and converted into a usable form, at least so you can understand what you’re looking at. This is the power of a DMP.

What Does a DMP Do?

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A DMP collects and organizes data from a variety of otherwise silo’ed data sources, and makes it available to other platforms such as DSPs, SSPs, and ad exchanges to be used for targeted advertising, personalization, content customization and beyond. Some people describe a data management platform as the “pipes” of ad tech — connecting many platforms in a neutral way so marketers can use their powerful audience data when and where they want.

How Does a DMP Work?

A DMP can collect unstructured audience data from any source, including desktop, mobile web, mobile app, web analytic tools, CRM, point of sale, social, online video, offline and even TV. A true DMP should collect audience data on more than a surface level, going far beyond things like URL and keyword information.

This first-party data — that is the data you own and have collected directly from your own customers — can be collected based on specific behaviors such as clicks, downloads, video uploads or video completions, interests like sports, football, parenting, museums and travel or demographic information. It can also include demographic data, socio-economic data, influencer and action data.

Lotame’s data management platform collects audience data from the following online and offline sources:
Sources of data

  • Web analytics tools
  • Mobile web
  • Mobile apps
  • Behavioral and demographic data
  • CRM data
  • Point-of-sale data
  • Social networks
  • Online video
  • TV data
  • and more!

What Happens Once the Data is Collected?

Once the first-party data is collected, it is organized into a series of segments called a “hierarchy”, which can change based on each end user’s business models. A large publisher network may have their hierarchy divided up into different buckets based on each of the individual websites they own. An agency can have separate accounts for each of their advertiser clients. Marketers could manage different brands’ data separately, while also having an overall holistic view of the data at the top level.

All of this data, once categorized, can be used to better understand your audience, create effective RFP responses, enrich your audience to learn more about them and extend your audience reach to address campaign commitments. In short, all of your audience data is collected in one place for a quick and easy understanding of who your best customers are, what content they interact with, and how best to reach them effectively.

There are 4 basic steps to getting started with a DMP; let’s review them here.

Organization

A DMP will organize your first-party audience data into categories and taxonomies, which are specified by those using the platform — in this case, that would be you. You define how that data is organized, which means you need to understand — and define — what you need out of your data before deploying a DMP.

Segmenting and Audience Building

Once the data is organized into the platform into segments, you can use this information to build audiences for specific marketing campaigns. For example, a retailer may want to target one particular ad to females 18-34 while another may be focused on men who frequently buy shoes online. Regardless of who they are trying to reach, marketers, publishers and advertisers rely on audience segmenting to power their data-driven campaigns and reach the right consumers at the right time.

Insights and Audience Profile Reports

Soon after the data has been organized and classified, you can take chunks and analyze it to discern customer patterns, trends and intent.

Audience Profile Reports give an in-depth view of the characteristics and interests of each “audience” that has been built in the platform. This information can be used to inform your future creative and messaging.

Activation

The final step is to activate the data, by putting it to work! 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. The most common DMP use case is running a targeted campaign to a specific audience via a DSP. Or, you can connect the DMP to your content management system (CMS) to adjust the content of your website for certain audience groups. The possibilities and use cases for data activation with a DMP are limitless.

 

How Do I Build an Audience in a DMP?

Once you’ve collected and organized your data, it’s time to build audiences. For any particular targeted campaign, a marketer can predefine the target audience for that campaign. So instead of choosing to spend your advertising dollars on a particular financial website to reach an audience of folks interested in finance, you can instead build a financial audience based on actual behaviors across the wider Internet.

Audiences can be built inside the data management platform using any combination of first-, second- and third-party data sources, which are combined using Boolean logic, which breaks down all values into either true or false. You can build as niche an audience as you wish, and are only really limited by the scale you need. Generally, the more niche the audience, the smaller the size.

data points collected in a dmp

What Data Points Can I Use to Build an Audience?

You probably already know your audience demographics and targets, and that is a good place to start when building audiences. Here are just a few of the data points you can use to build your audience:

  • Age
  • Gender
  • Location or region
  • Interests
  • Browsing history
  • Household income
  • Family size
  • Opinions — e.g., all customers who like/do not like X
  • Social networks — e.g., Facebook versus Twitter

If you don’t have adequate first-party data to build the audiences you need, the DMP should provide access to 2nd- and 3rd-party data to help scale your campaigns to reach your audience goals. Not sure how to choose what data to buy? Read more about 2nd-party data and 3rd-party data here.

 

Who Can Benefit From Using a Data Management Platform?

Professionals and businesses from every industry around the globe can benefit from a DMP. Upper or C-level management might rely on a DMP to make smarter and more informed decisions. IT or networking professionals might rely on a DMP to maintain and operate a companywide system, gaining insights from the tool that can be used to choose machines, software and more.

The basic business cases for a DMP can be separated into three groups: publishers, marketers and agencies.

who uses a data management platform

Publishers or media owners include anyone who own and manage websites. Publishers use data management platforms to manage the audience data collected from all of their websites and the data-driven advertising campaigns run across those sites. A DMP enables publishers to capture first-party audience data and enrich it with additional audience insights, allowing the publisher to increase CPMs for both direct sold and programmatic inventory. Because publishers collect rich audience data from their websites, many of them opt to sell customer data via a 2nd-party marketplace or a 3rd-party data exchange.

Marketers and agencies use data management platforms to identify and classify audiences at a significantly deeper level and to gather an extra layer of data about their audience, regardless of the data source. These insights into your most valuable customers allow marketers to identify and target prospects who look and act exactly like them so you can increase your audience base. They then fuel high-performing data-driven marketing campaigns with these audiences, so they can be sure to reach the right audience at the right time on the right device.

How Do I Implement a DMP Into My Marketing Strategy?

Now that we understand what a DMP is, the next question is how to implement it into your marketing strategy?

The good news is, you shouldn’t have to change a thing. Once the DMP starts collecting your data, you should be able to profile your existing customers and audience, extract meaning from your data, and improve campaigns for maximum performance.

A DMP should be the core of your marketing processes and strategies. The DMP can help you understand which advertising and marketing materials will resonate with your audience most, what content will get the most engagement from your customers and audience, and what message will inspire them to buy your products or pay for your services.

Suddenly your dreams of data-driven marketing can come true, and you can use the DMP to influence your campaigns for increased success.

 

What Do You Do With a Data Management Platform?

More important, however, is what you can do with all that data you collect. Here are just a few things you can focus on and what you can do with them:

  • Audience targeting and targeted advertising: Specify your audience and target their interests and needs via video, visuals and content
  • Content and product recommendations: Deliver personalized experiences for web and mobile users
  • TV DMP: Match your audiences across TV & digital so you can reach the same audience when and where they are ready to buy
  • Monetizing or selling data: Sell your valuable data for additional revenue
  • Audience enrichment: Learn more about your audience, beyond what they do when they’re on your website or other properties.
  • Grow your audience or customer base: Find a healthy supply of new customers to build brand loyalty
  • Paid search: Use DMP-driven audiences to target, suppress or dynamically update paid search campaigns
  • Paid social: Execute DMP-driven audience buys within social environments using Facebook and Twitter’s respective custom audience solutions

Out of all those scenarios — especially in e-commerce and marketing — delivering a personalized experience to your customers is one of the most important. You build a rapport or relationship with your customers by focusing on their interests and needs. Using data to personalize their experience is a great way to do that. It’s why brands like Amazon offer “recommended” sections with products similar to what a customer has viewed in the past.

personalized advertising with dmp data

Chances are, you’re already sitting on a mountain of valuable data. Most people understand the importance of collecting data and storing it for later. Unfortunately, storing and saving data is different from using it.

A DMP can help you turn that mountain into a goldmine!

DMPs offer the ability to reach the right customer, at the right time, on the right screen, for maximum campaign performance.

For more tips & tricks on how to maximize your ROI with a DMP, check out our DMP Playbook.

Why Lotame?

Lotame is known around the world as the best-in-breed DMP for marketers, agencies and publishers. We are independent, not owned by a giant marketing cloud. That means we focus all of our energy on continuing to build the best DMP in the world, and helping our clients be successful with their data. Read more about why our clients love Lotame.

Would you like to find out more about Lotame’s award-winning data management platform? We’d love to show it to you and talk about how our technology can help make your campaigns work harder and perform better.  Contact us, and we’ll be happy to give you a demo.

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