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The Oracle Data Cloud blog highlights the latest data-driven insights and trends in digital marketing and ad tech.

  • DMP
    February 3, 2020

The role of the DMP in 2020 and beyond: Debunking common misconceptions

Allan Stormon
Senior Content Marketing Manager

The start of a new year, much less a new decade, usually brings with it a healthy dose of predictions regarding what the future holds. The digital marketing business is particularly guilty of participating in this trend—who else is tired of reading about what technology or business approach is now “dead”? This year is no different, except for the fact that the predictions feel like they have more weight to them.

Amid the growing need for transparency in the advertising supply chain, advertising and brand executives are looking under the hood of their technology stacks and asking tough questions. The data management platform (DMP), having long played a central role in the marketing efforts of the world’s biggest advertisers, is naturally the subject of a lot of those questions. And with a greater focus on marketing ROI, these questions are justified.

There are many forces at play here, including increased data regulation, the phasing out of cookies, and the emergence of the customer data platform (CDP). But for any advertisers doubting the DMP’s role in 2020 and beyond, chances are there’s a lot more to the DMP than these surface-level concerns. So let’s explore the DMP’s role in detail and address some of the burning questions advertisers have.

At present, the majority of questions related to the DMP’s role in digital marketing fall into 4 core areas:

  1. Overall utility in a cookie-free web

  2. Customer expectations

  3. 3rd party data quality

  4. A greater reliance on 1st party data

After reading this article, you should have a better understanding of how modern DMPs are evolving to solve for these customer concerns, and how DMPs will be placed to serve marketers in the future.

 

1. A cookie-free web: The role of the DMP in an internet without cookies

Traditionally, the data architecture within a DMP has been reliant on 3rd party cookies, which will inevitably make some DMPs vulnerable as the market goes cookie-free. But those marketers declaring the death of the DMP due to the removal of cookies need to remind themselves what the best proxy is for a real person online. Asked another way, what digital identifier best reflects a person’s online presence?

The reality is, the cookie is one identifier among many, and a variety of data and customer identifiers need to be activated in a DMP to deliver results to marketers. Basically, 3rd party cookie IDs share a glimpse into a user’s activity on a specific web browser on a single device. This is a poor representation of an individual and shouldn’t be relied upon as a sole identifier. Other identifiers—such as email addresses, a brand’s unique customer ID, device IDs, and loyalty and reference numbers—all contribute to a brand’s ability to create a holistic view of its customers online. DMP vendors understand this and have therefore evolved beyond 3rd party cookies in tandem with the industry.

Today, modern DMPs are offering clients the ability to connect multiple identifiers from myriad sources across devices. With this technological progress, cross-device marketing becomes possible—and much easier to implement. So, while 3rd party cookies are being phased out, marketers can take comfort in the fact that they can achieve better visibility of a customer across all their devices and identifiers.

 

2. Customer expectations: Transparency in technology

Customer expectations from a DMP reflect what marketers themselves are expected to deliver. Most notably, this means revenue growth from new and existing customers, and seamless user experiences across channels. These expectations drive a need to review and challenge vendors that provide tools, technologies, applications, and platforms that enable them.

Given the current confusion around DMPs and their functional utility moving forward, vendors can alleviate concerns by committing to ongoing education and raising the awareness of where the technology sits today versus where it is heading. While the digital industry is fueled by innovation and building for the future, vendors need to be honest about how they represent the functional capabilities of their DMPs—articulating what is possible now versus the transformation of the platform itself to meet these next-generation requirements.

Another area where customer expectations are not being met is implementation. This is because the customer doesn’t receive adequate support through the implementation phase and day-to-day use of the platform, which is central to its success. DMP integrations are advanced, and as is common with most technology platforms, issues may arise. Access to resources in the form of account managers and platform architects is paramount to ensure proper integration and ongoing use.

 

3. 3rd party data quality: Ensuring DMP data is safe and compliant

Data quality is crucial to the success of a DMP, and thankfully, the industry is heading in the right direction here with a greater focus on sourcing, collecting, and distributing data in more transparent ways. This is largely due to the new standards set by recently imposed regulations such as the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR). While different in how they affect businesses, both regulations dictate how businesses can collect, store, and activate or distribute consumer data.

Many industry pundits have used these regulations to predict the demise of 3rd party data, which could eliminate the need for a DMP. But the reality is, it should aid in the cleanup of the industry and eradicate bad actors peddling noncompliant, poor-quality data—the result being better, high-quality, 3rd party data that is more effective in online advertising campaigns.

This is a trust and transparency issue. Advertisers and publishers need to ensure that their DMP provider upholds the highest standards in the partners they work with. Otherwise, the data in the DMP will be rendered useless, and the advertiser will reap the consequences of using bad data.

 

4. 1st party data: How the DMP is evolving to meet today’s needs

The concerns regarding the availability and viability of 3rd party data have resulted in a greater focus on 1st party data. Having been synonymous with 3rd party data for so long, this shift in focus is causing doubts as to whether DMPs can effectively collect and manage a different dataset. However, the truth is, DMPs today manage 1st, 3rd, and 2nd party (partnered) data. And to keep pace with the myriad sources and types of data, modern DMPs are evolving—developing functionality to support collection and ongoing management.

It’s important to note that compliant, 3rd party non-cookie data will always serve a purpose—it is needed to augment 1st party data so that marketers can increase scale and reach, and wherever possible, enrich 1st party data for improved personalization.

Another challenge with the shift to 1st party data relates to industry. There are industry verticals where personal identifiable information (PII) is more easily submitted by the consumer. Direct-to-consumer retail is one example. Brands in this sector are built on the back of 1st party data and the creative ways they activate it. But for brands in industries such as consumer-packaged goods (CPG), 1st party data is scarce—few consumers need or want to share their information with a snack brand. ­What are these brands to do?

Again, innovation is the key here. Modern DMP providers are augmenting their platforms with powerful technologies such as identity graphs. This helps brands in industries like CPG connect their data across 1st, 2nd, and 3rd party sources to build vast data lakes that can be segmented and activated against in any number of ways.

 

How to choose the right DMP

Choosing the right DMP means aligning your expectations as a marketer with your technology stack. For most businesses today, that means choosing a DMP that is people- and device-based, that leverages available compliant 3rd party data, and that can traverse between known and unknown customer data.

For forward-thinking marketers looking 3, 5, and even 10 years into the future, consider the nature of how online experiences across devices and channels have evolved, and what is now the norm for consumers. No matter what industry businesses operate in, the expectation is that they can anticipate the needs and wants of their customers and deliver services seamlessly across any of their properties. But all this is only possible through the proper management and activation of data. For that reason, a DMP’s value is unrivaled—it helps centralize data for use across an organization.

The DMP was never intended to be an answer to all advertising and marketing challenges. Only in recent years, amid the many changes that have occurred in the digital marketing industry, has the narrative around the DMP become increasingly critical. CMOs and CFOs are reviewing their technology stacks to better understand what is driving results and delivering value—and rightly so. Given the significant investment, cost of implementation, and ongoing management, the DMP is naturally going to draw the attention of cost-conscious business leaders. But that doesn’t mean its value is diminished.

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Join the conversation around 3rd party and 1st party data, and discover how the DMP is evolving to meet the needs of today's marketers, with our latest webinar. Watch now on-demand.

 

 

 

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