Data Management Platform | 9 mins read

What is a Data Management Platform?

what is a data management platform
Michelle Jaco

By Michelle Jaco

The data-driven world has vastly increased and changed how information can be obtained. Learning how to leverage different data sources to stay ahead of the competition can be a difficult task.

Technologies that are capable of automatically organizing, storing and managing customer information make it easier for businesses to learn who their customers are and where to find new prospects. A data management platform (DMPs) is one frequently utilized software that allows companies to identify audience segments, improve customer service, increase their revenue, and build brand awareness.

To understand the benefits of using DMPs, it's important to know their data collection capabilities, how they work, and the best practices for incorporating them into a marketing strategy.

What is a DMP?

Data management platforms collect and organize real-time data from online sources, such as analytics tools, or mobile and web apps. It can also collect information from offline sources such as Point of Sale systems, where customers conduct transactions. DMPs then organize, manage, and deliver the collected data to users for business purposes. I

t's also how businesses learn about customer behavior and purchasing patterns so they can provide a better level of service. In short, it takes raw data, cleanses and enriches it, and then segments it into different categories, such as demographics, that can be utilized to find new customers or run targeted marketing campaigns.

Where Does a DMP Collect Data From?

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DMPs collect and organize information from a variety of different sources, including-

First-Party Data
This is data that comes directly from the company's audience and sources, including company social media engagement, customer subscription data, or a CRM (Customer Relationship Management) system.

Second-Party Data When a business purchases information from an outside organization, it is referred to as second-party-data. Second-party-data can be sourced from an outside organization's social media sites, in-store purchase history, or survey responses.

Third-Party Data
Third-party data is bought from an outside source that is not the original collector of that data. It can be bought from large data aggregators that pulled it from other platforms and websites. Aggregators collect the information and sell it to outside organizations as one set. Some third-party data providers include Adobe, Adsquare, or Oracle.

How a DMP Collects Data

The manner in which first, second, or third-party data is sent to a DMP varies depending on the source it comes from. For websites, when a Javascript Tracker (a small snippet of code that is implemented so marketers can analyze the flow of visitors) is triggered by a person visiting the site or making a purchase, the DMP will collect, cleanse, and organize it into a common format that improves the value and quality of data. Data is segmented in the DMP according to attributes, such as demographics, device type, or website it originated from.

DMPs dig deep to collect unorganized and ambiguous audience data that may not seem useful on the surface but can provide plenty of benefits. Customer behavior can be gleaned from clicks, downloads, video upload choices, demographic information, socioeconomic data, or more. DMPs go beyond simply collecting URL and keyword information; instead, it codifies anything that might convey who a person is and what his/her interests are. Companies then utilize this comprehensive set of data generated by DMPs to create targeted ad campaigns.

How to Utilize a DMP

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1. Organizing
DMPs organize first-party audience data into hierarchies that depend on the end user's business needs. For example, a large restaurant chain may have their hierarchy divided up into categories by the franchise. Or, a political party that has different sites for different causes may have their hierarchy divided by each site they manage. To organize the data properly, the end-user needs to understand and define what they want to derive from the collected information.

2. Segmenting & Audience Building
Once the data is organized to meet a company's objectives, it can be utilized to tailor marketing campaigns towards an existing audience or to target different customers. For example, a restaurant may want to tailor an ad towards dine-in patrons in the 65+ category, but also create an ad for those who tend to order takeout online. DMPs can help businesses generate powerful insights so they can market towards each target group's needs.

3. Insights & Audience
Once the data is classified, it can be utilized to analyze trends in customer behavior, purchasing patterns, or intent. DMPs can give an in-depth view of the characteristics of each target audience that has been built into the platform.

4. Put the Data Management Platform to Work
Activating the DMP relies on the ability it has to integrate with other platforms, such as Content Management Systems or Demand Side Platforms. The purpose of this is so the audience profiles built within the DMP can be transported seamlessly to the target platform and then be utilized to run target campaigns. For example, a DMP can be connected to a CMS to tailor the content of a website to a specific audience.

How to Build an Audience

1. First-Party Data
Businesses most likely know somewhat who their target audience is and are aware of many of their characteristics. To glean more information that can help gain insight into additional customer behavior, there are multiple first-party data points to use, including age, gender, interests, browsing history, income, marital status, political status, income, or geography.

2. Second-Party Data
Second-party data allows companies to gain additional insights that wouldn't usually be available from their own data. New prospects can be found by purchasing a specific organization's first-party data that is relevant to a businesses' own target audience. For example, a young adult clothing store may purchase second-party data from a young adult shoe store because they know that the shoe store has a similar customer base.

3. Third-Party Data
Third-party data is any data that is purchased from a variety of sources by a company with no direct connection to the customer whose data is collected. Third-party data can be bought from social media networks, subscriptions, surveys, or websites. Some examples of third-party data include first and last names, email addresses, phone numbers, social media handles, or purchase history. This information is then utilized for marketing campaigns, to try and find new prospects in a less targeted way.

Generating insights from first-party data can help companies determine the characteristics of their audience, but some newer startups won't have as much data to analyze as their established peers. For these businesses, utilizing third-party data can help in finding additional customers across the internet and building insight into who their targeted audience could be.

Who Benefits from Utilizing DMP Technology?

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Though many different industries can utilize DMPs to gain insight into customer behavior and optimize advertising campaigns, publishers, marketers are the most common ones to do so-

Website Owners (Publishers)
A publisher is anyone who owns or manages a website. They utilize DMPs to manage the audience data collected from their site and the advertising campaigns that run on their sites. By capturing first-party audience data and analyzing it faster through DMPs, they can learn more about their customers and translate their findings into new content. Some publishers also sell their data to third-parties who want it for their own marketing purposes.

These industries utilize DMPs to gain deeper insights into their target customers' behavior. This will increase their customer-base, as well as locate new prospects that have similar attributes to existing customers. Marketers can extract data from first, second, or third-party sources and then utilize their existing knowledge about their target audience's characteristics to create data-driven market campaigns that run on websites their audience might visit.

How Businesses Use a DMP in Marketing Strategies

Once DMPs collect data, businesses can know who their audience is and what their behavior patterns are. DMPs can act as the core of advertising strategies by discerning which forms of marketing will attract a certain audience, what content will inspire them to purchase a service/product and why.

To illustrate, a retailer could use a data management platform to gather data from first-party sources. Based on the collected information, they may define four different core audience segments- Women 18-35, Men 18-35, Young Adult Females 12-17, and Young Adult Males 12-17. Then, the retailer could identify which main promotional channels would capture the interest of these groups, and run advertisement campaigns for them.

DMP Possibilities

There are endless possibilities of how to maximize the benefits of DMP collected data. A few suggestions are-

  • Sell Data - Sell information for additional revenue
  • Build Brand Loyalty Find new customers by utilizing second and third-party data sources to increase the customer base
  • Paid Search & Social Campaigns Utilize audiences driven by DMPs to target and update paid search and social media campaigns
  • Match Audiences Match audience across different channels, such as digital and television, so the same consumers can be reached no matter where they are
  • Tailor Content for Mobile Deliver personalized experience for web and mobile users by recommending content and products only available on those mediums
  • Be Creative Utilize customized videos, visualizations, and content to target an audience segment

Best Practices

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Here are four of the best practices for optimizing a DMP-

1. Set Goals & Reasonable Expectations
Creating a clear set of objectives can help companies leverage the most benefit from their DMP. Some typical goals include increasing sales, unifying data from multiple sources, knowing an audience, finding new prospects, and optimizing marketing campaigns. Establishing key performance indicators for each set of objectives will help in the DMP selection process.

Waiting to implement a marketing campaign may be a smart decision because the more collected data there is, the more information there is about the targeted audience. This is also why it's helpful for newer companies to consider obtaining second and third-party data, as they have not yet developed an understanding of who their consumer is.

2. Utilize Data from Every Source
Pulling in data from first, second, and third-party sources helps to build a complete picture of the targeted industry and consumers. Though it may be tempting for digital marketers to stick with data from websites, there are many other methods of collecting information, including Point of Sale systems (POS), Customer Relationship Management systems, television, social media, or mobile devices. Evaluating existing data can help indicate future financial and industry trends so campaigns can be created before the competition.

3. Don't Forget to Build, Test, Adjust
Once data-driven marketing campaigns are conducted, it's important to remember to monitor performance and make necessary adjustments. Building audience data is a continuous process.

4. Keep Data Governance Prioritized
Keeping the platform clean and organized should be a priority. Operational, technical, and personal controls should be in place to ensure that marketers can manage data securely. Also, keeping track of current customer data, where it is located, and who is responsible for it will help marketers conduct their campaigns more effectively.