The Importance of a Data Management Platform
The term ‘data management platform’ (DMP) has gained importance in today’s data-driven times. It is said to be the main link in the collaboration between marketing and advertising technology, and it also represents an ideal combination that marketers leverage to deliver excellent customer experiences and drive business revenue in a more effective fashion. A blog quotes a Euroconsultancy report named ‘The Role of DMPs in the Era of Data-Driven Advertising’, to define a DMP as, “A very smart, very fast cookie [data] warehouse with analytical firepower to crunch, deduplicate and integrate your data with any technology platform you desire. DMPs are designed to help both marketers and publishers make the data they have actionable, and are the fundamental tool for any data strategy beyond the elementary level.” It further goes on to add that DMPs “have the power to collect data from a diverse range of sources, create segments and deliver it to the ad platform for robust advertising targeting, based on real-world customer journeys, not just assumed ones. What was once educated guesswork now allows brands to target actual customers exhibiting real purchase intent based on real data input.” The same report lists the following benefits of a DMP:
- It empowers the companies to make a better use of the data that is already available with it
- It lets the company to find meaning of its data
- It allows the company to attract better customers who exhibit characteristics similar to the existing best customers
- It ensures that the company can undertake constant improvement efforts
- It makes it possible for the company to reduce wastage
- It allows the company to deliver across the entire customer journey
In the course of compiling this report, Euroconsultancy interviewed senior marketers and senior executives working for agencies, brands, and publishers. This revealed, “Where the DMP is able to address common marketing pain points — attribution, evaluating inventory, actionable datasets and standardization — respondents almost universally stated that these were either major or minor benefits with few stating there was no benefit at all. The inroads the tool is making into solving the data pain points in the context of a cross-channel approach is of particular note. Matching online and offline datasets that would result in more targeted advertising (40 percent considered it a major benefit; 47 percent a minor one) plus being widely viewed as improving cross-channel marketing effectiveness (44 percent major; 51 percent minor) means DMPs certainly have the potential to deliver a greater advertising punch.” Advertisers have come to recognize the benefits of having Data Management Platforms within the organization. They have realized a DMPs ability to engage it with a host of incumbent CRM systems and first-party data, delivering ease of use and enhanced functionalities. However, the only drawback of a DMP lies in the fact that it can cause a data overload, which can prove to be far more expensive (much beyond the ordinary cost of implementation of a pure DMP system) than the multiple benefits that it provides.
