What is a Data Management Platform and how does it work?
Compiling first-party data from your site visitors is the first step towards building successful audience campaigns in 2022. The next step is to analyze that data in order to activate it and use it effectively.
That is where Data Management Platforms, also known as DMPs, come in. Advertisers and publishers alike can benefit from using them in their advertising campaigns.
What is a Data Management Platform (DMP)?
DMPs aggregate and store data from a variety of online and offline sources. For example, data collected from,
- Any ad platforms you use (Google, Facebook, LinkedIn, etc.)
- User or site analytics (Google Analytics)
- Customer relationship management (CRM) software (HubSpot, Salesforce, etc.)
- Ad operations platforms
- Transactional systems (point-of-sale)
- Social media
- Video content
- And more
But how does a DMP work?
It starts with the help of first-, second-, and third-party cookies. The aggregated data fills in the gaps to provide a holistic profile on your users.
The information compiled from different tools is then organized and formatted into a single view. Making it easier for you to understand everything about a user from one place.
Creating these profiles can help to improve audience segmentation, ad targeting, content creation, and content personalization.
This is helpful for publishers who want to understand their audience on a granular level, which ties into an important feature about DMPs. While it’s useful to parse your user data, you need to be able to activate it. DMPs can send your audience data to demand-side platforms (DSPs), ad exchanges, agencies, and advertisers via integrations.
This allows for the demand-side to make better, more informed decisions when it comes to targeting certain audiences.
Data Management Platform misconceptions
Before we go further, let’s quickly squash some common misconceptions about DMPs.
The traditional DMP relied on scraping third-party data in order to create holistic user profiles. But with the deprecation of the third-party cookie, these were eventually rendered obsolete.
However, as regulations evolve, so does technology.
Newer DMPs have been prioritizing privacy-compliant solutions that rely more on first-party data. Making them a viable tool for publishers to use. Even in 2023.
Who uses a DMP?
Marketers use DMPs to gain audience insights on a deeper level. These insights tell them who their prospective customers are, what they like, what they’re in market for, all in order to create successful marketing campaigns.
This may have led to the misconception that DMPs are mainly used on the buy-side. But publishers can benefit from them as well. However, they do come with a cost.
DMP vs DSP
Ad tech vendors often offer more than one solution or service. For instance, SSPs who also offer an ad exchange (like Index Exchange). We just covered that DMPs can be used by both the buy-side and the sell-side.
DSPs, or demand-side platforms, are only used on the buy-side. They are used by advertisers to buy ads from various ad exchanges to access publisher inventory at scale.
Data Management Platform cost
Aggregating data from different sources, formatting it for easy consumption, and then sharing that information with multiple ad tech vendors is a lot of work.
Monthly plans can start from $2,000 USD a month, depending on which provider you use. While some of these may not have a minimum traffic threshold, these solutions can be quite costly.
How do publishers use DMPs?
So you’ve looked at your budget and found that you do in fact have room to onboard a DMP.
Earlier, we mentioned a few ways on how they can provide value to your business. Let’s expand on that.
Improve audience segmentation and ad targeting
Advertisers use their own analytical tools in order to understand who their target audience is. They want to ensure that their advertising budget is spent on an audience interested in their services. Thus, they look for sellers who have access to their specific, niche audiences.
In order to showcase your inventory’s value, you need to be able to understand your audience segmentation in detail.
“What are my site visitors interested in? Are these the interests that buyers are targeting?”
Once you are able to convey that value, you will be able to scale your programmatic deal offerings.
Content creation and personalization
Often when we write content for publishers, the context is usually around monetization. But publishers aren’t just focused on monetizing their content. They need to curate it too.
Content is king.
You’ve probably heard this phrase many times. But it’s true. As content creators, you need to understand what your audiences are interested in. From here, you need to provide personalized experiences so that they continue to come back. In order to do that, you need to know as much as you can about who’s coming to your website(s).
List of DMP providers
We could have labeled this section as “leading data management platform providers”, but that can be subjective. However, we can point you in the right direction to get started:
These are just a few of the well-known DMPs.
Most will offer common features such as a data marketplace or advanced analytics and reporting. What’s more important is to ask questions that are relevant to your business needs.
- Are they compliant with current privacy laws (and future cookie-related changes)?
- How exactly do they manage their cookie-related data?
- Do you use a DSP, an SSP, an ad exchange, or an ad network? If so, what integrations do they offer?
- What analytics do you get access to?
- How much control will you have over your data?
- How transparent is their process and analytics?
- What additional features are available and how much do they cost?
Data Management Platforms allow publishers to collect user data and enrich it with insights to help with audience segmentation, ad targeting, content creation, and personalization.
This enables publishers to scale their programmatic deals.
While this technology is continuously evolving to work in a cookie-less world, it would be unwise to write them off just yet. Newer DMPs prioritize the importance of relying on first-party data. As such, they prove to be a useful tool for publishers to include in their ad tech stack.
There are many DMP solutions available for publishers to explore. As you may often see in ad ops, similar technologies will have similar product offerings. It’s important to evaluate them against your current ad tech stack to see if they fit your business needs.
Are you currently looking into a DMP solution, or have already started to work with one? Let us know what your experience was like in the comments below.