Why There’s More To DMPs Than You Ever Thought!
There’s no question that data management is the new “it” concept. It’s become impossible to go to an industry event without talking about it (or “big data”). And yet, the abbreviation DMP (Data Management Platform) is often tossed around as though all DMPs are the same. In fact, there are at least two distinct types […]
There’s no question that data management is the new “it” concept. It’s become impossible to go to an industry event without talking about it (or “big data”).
And yet, the abbreviation DMP (Data Management Platform) is often tossed around as though all DMPs are the same.
In fact, there are at least two distinct types of DMPs, and, while they have some level of overlap, their feature sets are ultimately driven by two distinct customer types: the marketer and the publisher.
DMPs And Marketers
To a marketer (representing “demand”), a DMP is a central place to organize both actionable customer data and data about prospective customers.
In many ways, the marketer’s DMP has aspects of a CRM system — the key difference being that a CRM setup generally isn’t connected to outbound marketing beyond, say, email campaigns.
A DMP, by contrast, is built for the world of programmatic real-time marketing and, by virtue of its connection to a demand-side platform (more on that later), allows for a wide array of marketing campaigns.
For example, a credit card company might rely on its DMP to serve display ads to infrequent credit card users who have their cards on hand and have great credit histories.
DMPs And Publishers
To a publisher (representing “supply”), a DMP is a means of augmenting what it knows about its audience. This is particularly useful for driving up the effective CPMs on non-prime inventory.
For example, a publisher might layer on 3rd party data and sell this more valuable audience even though it’s serving ads on its own tier-three inventory. Or, think of a comparison shopping website using a DMP to enrich what it knows about its audience by adding demographics data from a third-party data aggregator, such as Exelate or BlueKai.
These two very different user scenarios result in DMPs that are specialized for different goals. Publisher-focused DMPs are primarily focused on extracting value out of a limited set of impressions, and so they concentrate on tight integration with the publisher’s ad server.
Marketer-focused DMPs, on the other hand, focus on extracting the most value out of a virtually limitless supply of impressions. They need to identify the exact audience out of a pool of every impression on the Internet.
Stand-Alone And Integrated DMPs
DMPs also come in two flavors — stand-alone and integrated — and each solution comes with its own pros and cons.
Stand-alone DMPs, as the name suggests, exist as a single piece of technology and need to be stitched into other platforms to “do something” actionable. Proponents of stand-alone DMPs will argue that you want to stay agnostic to the output (i.e., the demand-side platform) you use, and, while there is some merit to this argument, there is ultimately a big disadvantage to the stand-alone approach.
The isolated DMP has to be synchronized with a different tool and, as such, experiences audience or cookie loss when that occurs. I have seen that loss be as high as 40% — and that’s a lot of your data to lose before you even get started!
In addition, data rarely flows seamlessly between an isolated DMP and a demand-side platform (DSP). So, the DSP cannot be querying real-time data whilst it is making the buying decision and instead must rely on data that was pre-computed, often 24 hours ago.
If you are in the retail business getting ready for the Halloween costume business, for instance, do you still want to be serving prospecting impressions to someone who just converted through your email program? If you aren’t using real-time data, then that’s a common scenario — and the only way around it is to have the DMP making its decisions at the time the DSP needs to know it.
Separate = Not Equal (To Integrated)
Simply put, separating the “audience generation” from the “media buying” limits efficiency.
A handful of DSPs (Chango is one of them) have integrated DMP functionality suitable for the marketer. This integrated approach allows for the instantaneous feedback loop, giving marketers immense power and control. The market is headed far more in this direction, in part because it makes it easier on marketers if they can use one platform instead of two.
Publisher-focused DMPs are not widely integrated into existing platforms and are generally stand-alone solutions. However, it’s fair to assume that SSPs (supply side platforms) will soon adopt DMP-like functionality. If the core value of an SSP is to drive revenue by creating an open market for inventory, it only makes sense that elevating the value of each impression (through DMP functionality) would be the logical next step.
In short, it’s time to stop using DMP as a blanket, one-size-fits-all term. It’s also time to recognize that an ideal DMP setup is one that is stitched with the moment of the execution, allowing for a seamless marketing experience. After all, we owe it to both publishers and marketers to make our famously confusing industry tools as intuitive as possible.