What is Data Management Platform?

A data management platform (DMP) is a unifying platform to collect, organize and activate first-, second- and third-party audience data from any source, including online, offline, mobile, and beyond. It is the backbone of data-driven marketing and allows businesses to gain unique insights into their customers.

While big data is instrumental to effective data-driven marketing campaigns, you can’t do much with the raw information. You need it sorted and converted into a usable form, at least so you can understand what you’re looking at. This is the power of a DMP.

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What does a Data Management Platform do?

A DMP collects and organizes data from a variety of first-, second-, and third-party data sources, and makes it available to other platforms such as DSPs, SSPs, and ad exchanges to be used for targeted advertising, personalization, content customization, and beyond. Some people describe a data management platform as the “pipes” of ad tech — connecting many platforms in a neutral way so marketers can use their powerful audience data when and where they want.

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How does Data Management Platform work?

A DMP essentially collects all your data from any touchpoint you have with your customer. This can be a digital touchpoint – your website, mobile app, marketing campaigns, social media, etc. as well as offline – store information, call center inquires. It also collects third-party data. The DMP then creates audiences and uses data to push the audiences into buying /execution points.

Next, the DMP optimizes your results using lookalike audiences. A lookalike audience is a term used to identify potential prospects that exhibit the same characteristics as your best-performing customer groups. Having all your data in one place allows the DMP to analyze and track your best-performing customers and create lookalike audiences that are very similar to it. This is a great way to tap into new prospects while knowing in advance that there is a good chance of turning them into profitable customers for your company.

Finally, the DMP collects response data and repeats the process using the new data gathered. This process is a constant loop that continues to grow and optimize in order to fine-tune your campaigns in real-time and find new audiences for you.

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What are the advantages of Data Management Platform?

The advantages of using a DMP vary depending on your industry and your goals in using the technology. But any business that could benefit from using data — which is nearly every business — could benefit from a DMP. With that in mind, here are some of the most common key benefits you could be missing out on if you’re not taking advantage of this technology.

1. Increased Revenue

Perhaps the most enticing benefit of using is a DMP is the increase in revenue it can lead to. Using one of these systems enables you to more accurately target your ads to the right audience, which results in higher response rates, increased brand recognition and, ultimately, higher conversion rates. For a marketer, increased conversion rates generally means more sales of your products and services, which leads to higher revenue.

A DMP also provides you with a better sense of direction when choosing proper placement for ads and promotional materials, increasing your return on investment for your marketing spending. For a publisher with valuable first-party data, you can also use a DMP to sell that data to other advertisers, opening up a new revenue stream.

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2. Streamlined Data

As a marketer, you are likely collecting lots of data from a variety of sources. Some of the more common channels include email, e-commerce, social media, mobile apps and customer loyalty programs.

DMPs collect all that data and conveniently store it in one place, so you have one cohesive view of your customers across screens and platforms. DMPs will process, organize and prepare your information, offering a much clearer picture and a better understanding of your audience, strategies, and efforts.

3. New Target Customers and Audiences

When selling a particular product or service, the goal is often to find more customers. But this is easier said than done. How can you effectively find more potential customers similar to the ones who are already brand loyalists?

DMP data can open you up to new audiences and customers via audience extension and look-alike modeling. Audience extension is a method of adding on 3rd party data onto your existing audience, in order to find additional customers across the internet. For marketers without a lot of first-party data, audience extension is key to growing the size of your target audience. Lookalike modeling is another option that relies on machine learning to find new possible customers most likely to interact with your customers. All you have to do is provide your “seed” audience of your ideal customers or target, and the algorithm does the dirty work, to grow your target audience size.

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4. Meeting the Needs of Your Customer Base

You can’t always have a one-on-one relationship with all of your customers, but you can get to know them better with the right amount of data, organized in a digestible way. For example, you can learn which of your products and services they value most. Or you can learn how they react to various promotions and marketing materials, and what resonates with them most and drives the most sales.

You can also use your data, such as your search results, social media likes and surveys, to predict what new products or services your customers might want. Ads United, for example, could discover that the landscaping company’s customers would also pay to have the outside of their homes power-washed, a service the landscaper might be able to offer.

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5. Continuous Learning

DMPs aren’t just solutions to short-term problems, although they’re great for that. They also help agencies build out their long-term strategies. Companies can use them to solve immediate problems, such as advertising spending that’s too high or promotional content that isn’t reaching the right audience. But they can also use the information they gather from those uses to help them reach their long-term goals.

Every time a company successfully optimizes a campaign using their DMP, they can apply what they learned to future campaigns. The more they learn, the better their future campaigns will be. They’ll be successful more quickly, too, and will require fewer adjustments. This consistent progress can help the company reach its long-term growth goals.


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