As a marketer, your goal remains constant—find the best way to understand and connect with your customers so you can build longstanding relationships. To do this effectively, you need to define your audience, then use what you know about them to connect on a personal level. But with the overwhelming amount of customer data available, figuring this out is a real challenge. A data management platform (DMP) fills this need.
Maybe you already know what a DMP is, how it works, and how it can help your business, but you’re hesitant to add another piece of technology to your operations. Or maybe you’ve never heard of a DMP and don’t understand how it can be critical to your digital marketing strategy. No matter which camp you fall into, let’s explore what a DMP is, the benefits of incorporating one into your marketing technology stack, and other frequently asked questions that have some scratching their heads.
A DMP collects, organizes, and activates audience data from various online, offline, and mobile sources. Using that data, you can then build detailed customer profiles for targeted advertising and personalization initiatives.
Think of a DMP as a large data warehouse where you can store, organize, and analyze all the customer data you’ve collected—including behavioral, geographic, and demographic data. You can gather data directly by adding simple snippets of code called ‘tags’ to your web pages. The DMP will then track the user’s journey.
The insights provided include the URL and keywords and who has visited certain pages. Of course, it can also import data, such as loyalty program profiles, email lists, social media, lead tracking data, and in-person point of sale information—whatever data you have can come together in your DMP.
DMPs then group users with matching or similar attributes into appropriate audience segments. Expand your clearly defined audiences by creating lookalike audiences, which are potential customers with characteristics that match your ideal customer. Then you can use that data to drive personalized and contextual advertising that your customers and prospects are more likely to engage with.
The result? You have a comprehensive snapshot that provides insights on how to best engage with your customers and deliver the level of personalization they demand.
By gathering, organizing, and sharing data, DMPs can help you design targeted ad campaigns, reach highly relevant new audiences, and drive personalized, cross-channel interactions.
While many ad platforms can create lookalike audiences, they do so based on data from a single source. A DMP, on the other hand, aggregates your data from various adtech solutions. With this aggregated data, you can build your campaigns—and your lookalike audiences—on a broader dataset, which is more accurate and reliable information.
Another benefit of having a DMP in place is more efficient ad programs that in turn improve your ROI. Let’s say you want to advertise on Facebook to audiences similar to your company’s email list. Without a DMP, you would need to log in to the email platform to download the email list, then log in to Facebook to upload that data there. Facebook wouldn’t have the ability to update the list when new contacts are added to your company’s email list, so you’d need to repeat this task indefinitely.
Instead, the savvy marketer would automatically feed email and Facebook data into the DMP. Then it’s all there at your fingertips, no matter what kind of ad campaign you want to run.
Check out this article for a more comprehensive overview of how DMP benefits customer insights, data strategy, and data activation.
Customer data platforms (CDPs) and DMPs are both essential tools to help you reach the right customers in the right way at the right time; hence beginners sometimes confuse them. They may sound similar, and there is some overlap, but each has a distinct function.
A CDP works for known audiences. If you’ve already identified an audience, a CDP can help you strengthen your relationships with them and build loyalty. The data collected by your DMP—especially if it is tracking data based on cookies—is anonymous. The DMP can track correlations, not individual user behavior.
Imagine you’re marketing a calorie-counting app. Your customer Garfield is a middle-aged fellow with a love of lasagna. The DMP doesn’t know Garfield. It knows that a male who likes lasagna is correlated with a product purchase.
On the other hand, your CDP keeps up with Garfield in particular. In your CDP, your customer support team can see Garfield’s recent touchpoints with the sales funnel, emails he’s sent to other departments, and other activities. This kind of personal profile is useful when assisting customers but would create an unnecessary burden on privacy in the DMP.
A DMP works for both known and unknown audiences. Naturally, the data you have on Garfield can also be sent to your DMP, but the analysis it will perform will group Garfield into buckets of data such as “pasta fans.” You would not use a DMP to look into whether Garfield has been consuming more pasta than his diet will allow, which credit cards are attached to his account, or to help him change his password. But you can use that same data to identify similar users automatically and target ads to them.
If your intent is to gather and segment third-party data for short-term customer leads and conversion, use a DMP. Use a CDP for long-term customer engagement that requires first-party data. More on when to use CDP vs DMP on our blog.
Karma has over a decade of experience with content marketing and SEO. In addition to marketing, she writes about tech, music, and politics. You may find her shamelessly singing along with the muzak at the grocery store or giving marketing advice at KarmaBennett.com.