Data Management Platforms

Buyers guide

If you’re a marketer who has done any large-scale digital advertising (think programmatic ads or retargeting), chances are you’ve used a data management platform (DMP). These tools essentially take in data from multiple sources and help you analyze it, so you can better target adjacent customers or personalize messages in your marketing campaigns.

Data management platforms have grown over the last decade, and marketing demand for their capabilities is still strong. However, this type of software has traditionally depended on cookies, meaning increasing cookie regulations could affect data management platform functionality.

Many ad-buying platforms like Facebook and Amazon already have data management platform capabilities built in, so you’ll need to assess whether your company needs a standalone tool or if the available built-in targeting capabilities will suffice.

Here's what we'll cover:

• What is a data management platform?
• Common features of data management platforms
• What type of buyer are you?
• Benefits and potential issues
• Key considerations for purchasing data management platform software
• Market trends to understand

What is a data management platform?

DMP software analyzes customer data across multiple channels and enables users to enhance audience engagement with marketing campaigns. DMPs analyze targeted marketing strategies from online and offline sources and present the data in graphs, charts, and other data visualization methods. This helps advertising agencies, marketers, and online publishers better learn about their audiences.

Here’s how DMPs work:

Common features of data management platforms

While features vary from product to product, data management platforms typically offer some or all of the following functionality:

What type of buyer are you?

Digital marketing leaders: Data management platforms are primarily used by marketers across many organization sizes and industries, especially those that use a large, diverse amount of customer data. These buyers are typically looking for ways to do the following:

• Target ads: Build and find adjacent audiences for programmatic ad campaigns and multichannel retargeting.
• Expand audiences: Use known customer and prospective customer attributes to find similar audiences and build on programmatic ad reach.
• Measure campaigns: Create reports and visualizations, and share analysis with external audiences (such as an outside agency).

Benefits and potential issues

Here are a few benefits of data management platforms:

• Identify customer attributes: Learn about customer attributes such as browsers, devices, households, and other characteristics so you can reach your target audience with an ad or personalized message.
• Import and collect data: Take in data from multiple sources (such as your CRM, marketing analytics, point of sale (POS) system, and publishing partners) as well as your website, mobile app, and other channels using native tags and other integrations.
• Set up triggers and rules: Personalize messages and inform marketing decisions. For instance, you could set a rule to not display an ad to someone if a user visited a website and made a purchase, since they already completed the desired action.
• Measure and report on data: Collect performance data from marketing and media channels. Organize and analyze that data to explore trends and create visualizations.

Here are a few potential issues with data management platforms:

• Cookie considerations: Most data management platforms use cookies, which Apple Safari and Firefox have announced they will no longer support. Chrome also announced that it won’t support cookies after January 2022. Because of this, you’ll want to explore alternate approaches to retargeting and lookalike modeling that don't use cookie data.
• Privacy regulations: Traditionally, data management platforms do not use personally identifying information. Rather, these platforms use anonymized, unique identifiers such as cookie IDs or user IDs based on certain characteristics (e.g., browser or device). However, regulations like the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) encompass things like fingerprinting using an IP address. Since these regulations still lack many legal interpretations, there remains uncertainty around how they could affect DMPs.

Key considerations for purchasing data management platform software

Data management platforms have been vital to digital advertising for the past 10 years, but there are still some key considerations to keep in mind

• Cloud vendor embedded functionality: Programmatic ad tech platforms—like those from Facebook, Amazon, or Google—often already have embedded DMP-esque capabilities. However, these functions typically provide aggregated data about audience segments, rather than user-level data.

Market trends to understand

Because data management platforms may be going through some changes, these market trends are important to note:

• Cookie data dying out: DMPs may be undergoing a necessary evolution due to the fact that most browsers already don't support or will soon cease support for cookies.
• Built-in ad tech functionality: Many ad tech platforms now include built-in DMP capabilities. If you already use ad tech platforms like Facebook, Amazon, and Google that offer similar audience data, it's worth investigating whether the included functionality meets your needs before investing in a standalone platform.
• Beware of workarounds: Some ad tech platforms are exploring options to get around cookie data restrictions. Certain platforms are looking at IP address or link decorating (which means adding extra strings to URLs to identify certain behaviors), but these may not be good long-term solutions. Some browsers may also try to prevent these types of loopholes.