While DMP start-ups tout technologies from yesteryear that only work on individual web domains, smart publishers are leveraging next-generation DMP technologies that provide scaled, privacy-enabled connectivity between data sources and platforms.
by Adam Solomon, Chief Growth Officer, Lotame
This blog post is the third in a three-part Fact Check Series to help publishers and marketing ecosystem participants cut through the noise, smoke, and spin coming from a select group of DMP start-ups, and facilitate a more direct and transparent conversation on finding innovative and effective ways to connect, enrich, and activate consumer data in a manner that respects consumer privacy and empowers choice.
In Part 1, I detailed the facts on profile identifiers, browser storage mechanisms, and privacy regulation. I demonstrated that Lotame does not “depend upon 3rd party cookies,” but rather uses 3rd party cookies, 1st party cookies, as well as browser local storage, to give our publisher clients the most robust and flexible techniques, in order to store profile identifiers associated with their website visitors in a privacy compliant manner.
In Part 2, I focused on the evolution of media targeting techniques and clarified what the term “match rate” really means. In particular, I described match rates in the context of Contextual Targeting and Audience Targeting. I demonstrated that when transforming Contextual Targeting activations into Audience Targeting activations, the Lotame platform returns the expected match rate to Google Ad Manager (DFP).
In this Part 3, I will propose a re-framing of what effective next-generation data management technologies should provide to publishers, with an emphasis on scaled and privacy-enabled connectivity between data sources and platforms. I will demonstrate that as an industry, we have seen at least three generations of DMP technologies, and the functionality currently being offered to publishers by start-up DMPs such as Permutive are not “next-generation” as portrayed by their marketing teams, but are more akin to DMP 1.0 from 15 years ago. While “DMP 1.0” is a cleaner story to tell when regulation is complex and increasing, regressive technologies won’t bring the industry forward or meet any but the most basic requirements.
True forward-thinking innovation for publishers will be based upon connecting publisher data to marketer data in meaningful ways across channels, platforms, and devices and providing the means for all parties to analyze, enrich, and activate for commercial benefit — while always respecting consumer privacy and empowering choice.
Since the advent of newspapers in the 17th century, advertising in publications has been premised on publishers developing and promoting content designed to attract certain types of audiences, and then selling contextual ads against such content. Fast-forward to the late 20th century, even the arrival of online services like AOL, and the disruptive nature of the World Wide Web didn’t materially change the contextual nature of advertising against publisher content.
Approximately 15 years ago, digital publishing experienced a seismic shift. The combination of capabilities afforded by web browser technologies and advancements in server-side data processing opened up new and innovative vehicles for digital advertising — audience targeting. With audience targeting, ad networks and technology platforms could create rules to associate consumer web surfing activity on publisher sites with behavioral attributes, attach those behavioral attributes to browser cookies, and target those cookies with advertising on websites other than the ones where the original behaviors were observed.
A new breed of technology companies, called Data Management Platforms (DMPs), came on the scene to help publishers save and organize all the data created by digital traffic, and to take advantage of advertising sales opportunities powered by audience targeting. These first generation DMPs included well-known names such as Bluekai, Demdex, Audience Science, Krux, Aggregate Knowledge, and Lotame.
At the time — 15 years ago — the role of the DMP was pretty straightforward: Transform contextual desktop web activity into audience segments and pass those audience segments into a website’s adserver, most likely DoubleClick for Publishers (DFP).
[Important Note: Compare the functionality described in the paragraph above to the functionality provided by DMP start-ups like Permutive that claim to be “next-generation.” Does next-generation mean use cases and technology from 15 years ago? We’ll return to this point later on.]
Life was so simple during the age of DMP 1.0.
In the blink of an eye, five years passed and everything changed again for publishers. Smartphones, social networks, and programmatic media buying shuffled the deck for publishers and DMP technology providers. During this era, a new breed of DMP technology company arose that specialized in audience targeting for mobile app environments (remember Jumptap?), social networks such as Facebook introduced their own versions of audience targeting based on their platform technologies, and programmatic advertising ushered in the need for data pipes connected to buy-side platforms as well.
An important challenge that arose during this time was how to use data to effectively plan, activate, and analyze media campaigns across these channels and platforms. This led to a focus on the mechanics of syncing IDs between platforms using in-page pixel syncs, and the emergence of technologies and venture-backed companies focused on “cross device” or “device graph” technologies. New entrants included Crosswise (acquired by Oracle), AdMobius (acquired by Lotame), Drawbridge (acquired by LinkedIn), and Tapad (acquired by Telenor). The primary challenge that these companies were focused on was how to connect or associate activity on a desktop/laptop computer with a mobile device — literally “cross device.”
Under the hood, the reality was a bit more nuanced. When it came to desktop/laptop computers, cross-device technologies were using 3rd party cookies in web browsers as profile identifiers. So if a person was using two different web browsers on the same computer, it could conceivably be considered two devices. If a person deleted their 3rd party cookies, and a new profile identifier was generated, then it would also be considered a new device. On the mobile device side of things, there were other important nuances regarding what was considered a device. Mobile web browsing was similar to desktop web browsing in terms of its reliance on cookie-based identifiers. In the mobile app environment, both Apple and Google moved towards providing OS-based solutions for provisioning consistent ad identifiers to all licensed apps on the device. For Apple iOS, this was called the ID for Advertising or IDFA. For Google, this was called the Google Advertising ID or GAID. It is significant that the hardware guys, who in some cases have declared war on cookies for mobile web, have facilitated a static advertising ID for mobile.
So “cross-device” was — and is — more like “cross-ID” based on the underlying reality.
In addition, cross-device technologies introduced some new vocabulary to describe how these IDs could be associated with one another to put the “cross” in cross-device. Terms such as “deterministic matching” and “probabilistic matching” made many of us sound smarter at cocktail parties.
These syncing and graphing technologies were nascent and not well integrated across the ecosystem. However, they did shine a spotlight on the need for publishers, marketers, and ecosystem participants to look beyond desktop web + DFP (DMP 1.0), and to either build, buy, or license technologies to connect data across devices and media buying platforms.
DMP 2.0 was defined by data management solutions that began to address the emergence of additional device types and media buying platforms, and the technologies required to connect and extend audience segments across those environments. Even back then, publishers knew that consumer data needed to be fluid and connected across platforms and partners in order to drive their business forward.
Fast-forward to today, and the media and technology landscape has continued to change at a rapid pace.
On the data input side, publishers are seeing consumer 1st party data flow into their systems from web, mobile app, email, CTV/OTT, CRM, and an assortment of smart/IoT devices. In addition, publishers also have the ability to access consumer behavioral and attribute data from 2nd party and 3rd party sources. In this context, 2nd party would typically mean consumer data sets originating from their marketer partners, and 3rd party data would be anyone else providing data. Successful publishers are using all these data sets in combination to get a complete view of their consumers beyond the content interactions they observe on their properties.
On the output/activation side, publishers are feeding data into adservers, SSPs, programmatic header wrappers, analytics platforms, content optimization platforms, content management systems, data lakes/streams/rivers, and marketer platforms.
Powering these data flows are an exploding array of consumer devices and applications, most of which were not designed to be interoperable from a data perspective. To add further complexity, browser developers such as Apple and Mozilla have taken it upon themselves to block or shorten the lifespans of different flavors of browser cookies in the name of consumer privacy, thereby making it more challenging to connect data in web environments. And speaking of consumer privacy, hanging over all of these operational data challenges are an expanding array of regional data regulations that provide consumers with protections/controls over how their data is tracked and used.
As a result, there has been a flurry of innovation and M&A/corp dev activity in the data management space as companies look to expand their solutions for publishers and their marketing partners. Some companies that were pure DMPs back in the day joined forces with larger marketing technology companies and integrated into their stacks of marketing automation and analytics solutions. Examples of these combos include Bluekai/Oracle, Demdex/Adobe, Krux/Salesforce, and Aggregate Knowledge/Neustar. Other companies such as Lotame maintained independence and focused on developing advanced data-driven solutions to specific challenges in advertising, audience development, content personalization, consumer marketing, and data licensing.
Against this backdrop, it has been increasingly difficult to define what a DMP is anymore. It was much easier back in DMP 1.0 days to define the product-market fit for a DMP. Today, client types, data types, and use cases are so diverse that a single acronym isn’t sufficient to capture the full scope of capabilities. At Lotame we’ve moved away from using the term DMP to describe who we are and what we do, and instead focus on being the leading global provider of unstacked data solutions.
But whether a company describes itself or its solutions as part of a DMP, CDP, martech stack or other, it has become increasingly clear that effective next-generation data management technologies must provide publishers with scaled and privacy-enabled connectivity between data sources and platforms. That is table stakes for effective data management.
Against the backdrop of proliferating device types, fragmentation of IDs across and within websites, and the demands of privacy regulations around the world, it’s been surprising to see that the recent crop of DMP start-ups such as Permutive have developed technologies and solution strategies primarily focused on publisher isolation instead of publisher-to-ecosystem connectivity. They have essentially stranded publishers on their own “data islands” in structures that might not survive the next privacy or browser storm.
You don’t need to take my word for it, just look at their websites and marketing materials. The emphasis of these companies is encouraging publishers to look inward, turn the clock back 15 years to DMP 1.0, transform contextual desktop web activity into audience segments, and pass those audience segments into a website’s adserver. As I outlined in Part 1 and Part 2 of this Fact Check series, there are no magical technologies being used by these contextual DMPs, and the functionality that they provide are features (or sub-features) of much more complete and robust data and marketing technology platforms.
What’s completely missing from these “Disconnected DMPs” is a focus on the capabilities required to help publishers and their marketing partners stitch data across websites, devices, platforms, and channels. It’s imperative that any modern data technology platform provides scaled data connectivity solutions. Small DMP start-ups like Permutive don’t have ID graphing technologies. To the extent that they have any inter-platform connectivity, they have to rely on 3rd party pixel syncs powered by other companies — which they don’t talk about publicly since it runs counter to their cookieless fiction. But if you’re considering working with Permutive, ask them the following two questions:
When one is faced with adversity or uncertainty, it’s human nature to turn inward to what’s familiar and comfortable. This truism applies in business, politics, and society. But many times, the answers we seek and the help we need can be found around us in our community, among our partners and peers.
The challenges that publishers and marketers face today in a fragmented data landscape are significant … but not insurmountable. Looking inward with technologies, partners, and solutions that isolate your data from the broader marketing ecosystem is not the right path forward for publishers looking to grow their businesses. It may feel comfortable and safe, but it’s a nearsighted approach.
Growing your business and helping your marketing partners succeed requires finding your consumers across many platforms and channels, understanding more about them, and engaging them in smart, respectful dialogue.
Complete, consistent, and compliant data connections will deliver greater scale and precision for brands and publishers and better experiences for consumers. Publishers need next-generation DMP solutions made for today’s digital advertising challenges and future-proofed for tomorrow’s opportunities. They need trusted solutions grounded in partnership, privacy, and a panoramic view of the consumer.
At Lotame, our goal is to provide publishers with next-generation data solutions that help you “find your people” around the world and make meaningful, respectful connections that last. We’ve recently announced the release of Lotame Panorama ID, the first global cookieless identity solution for a privacy-first open web. Learn more about our identity solution.
How are marketers and publishers adjusting their customer acquisition strategies in light of nonstop industry change? We surveyed over 1,400 decision-makers to better understand identity’s role in their cookieless future, what they’re adding and removing from the next-gen tech stack, and where they plan to invest today and in the future. Get the report here.