Following my recent article explaining DSPs and what they mean for the world of digital marketing, I thought I’d turn my attention to another important acronym in the modern digital landscape. This time I’m going to discuss DMP – or Data Management Platforms.
As any marketer will tell you, data now powers pretty much every aspect of digital media (or it should) and DMPs are there to help us make sense of the huge piles of data being created. As a basic definition a DMP is a piece of software that gathers, sorts and distributes information to assist marketers, publishers and agencies.
DMPs can house and manage any form of information, however, for us marketers they’re most often used to manage cookie IDs to help display online adverts to specific audience segments.
With the increased sophistication of advertising technology (check out this article on programmatic) advertisers now buy media across an array of sites using DSPs, ad networks and exchanges. DMPs help coordinate all this activity and audience data together in one location and combine results in order to help optimise future media buying.
What’s the difference between a DMP and a DSP?
As can be expected due to the similar names, many people get confused between DMPs and DSPs. A DMP is used to store and analyse data, while a DSP is used to buy advertising based on that information. So one without the other is fairly useless. Data is fed from the DMP to its DSP to help inform decisions – but on its own, a DMP can’t actually do all that much.
However, like many areas in advertising technology today, the line between DMPs and DSPs is beginning to blur. An increasing number of DSPs are starting to offer clients DMP technology as well. The argument being that it’s easier to use a single platform instead of two.
However, standalone DMPs make data more portable, meaning it’s easier to feed into a wide range of DSPs, thereby widening the scope and range of your messages.
The three roles of the DMP
Having defined the basic role of a DMP I thought it would be sensible to take a closer look at the process and have split the DMP’s role into three: Import, Find and Implement.
Import –the DMP takes information from different systems and organises it at an individual customer level (if it’s about customers or prospects), or at the cookie level (if the individual is unknown).
For instance, this could include customer IDs, email addresses, what they have bought or looked at, or their loyalty status.
Find audiences and segments. This is where you define your audience (e.g. ladies between the age of 20 and 35, who live in London and like a particular high end retailer) based on knowledge gleaned from your first party data and then – and this is the clever part – the DMP finds lookalikes by synching cookies from different places to help find exactly the right group of anonymous cookies to buy ads against.
Distribute – This is where the DMP sends an instruction based on Import and Find and is when it needs to be plugged into software (like a DSP) which is able to action findings.
What does DMP mean for marketers?
DMPs consolidate user data into a centralised platform. They can be used not only for buying ad impressions, but also to help publishers achieve the long-term goal of attracting predefined targetable audiences.
DMPs can help publishers gain more precise information about their audiences, which is useful not only in helping to sell more targeted, more effective advertising, but also in providing greater insight into the needs and interests of their readers or viewers.
In actual fact DMPs also have a role to play in the customer journey – as brands can use DMP technology to decide what content, offers and information particular audience groups are shown on their own websites. But that’s probably a story for another time.
The DMP is an important component of the data-driven marketing landscape. Without the ability to gather, manage and measure large quantities of data, the capacity for brands to harness the potential of large-scale data-driven more effective and efficient marketing will be difficult to achieve.
For more on programmatic advertising check out our archive.
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