Consumer behavior continues to evolve as new, more powerful devices make the Internet available everywhere.
For example, customers can shop in a store and use their phone to scan a barcode to check online prices for a specific product – not to mention search for customer reviews and order the product.
As the world becomes more digital, marketers are forced to adjust traditional CRM strategies to incorporate new customer behaviors, including consumers jumping between and across channels though the buying cycle.
But I think if most marketers were honest with themselves, they would say that they are “doing ok” in managing this transition, but not “doing great.” There is good news, however, in that powerful new technologies can help marketers move forward more quickly through this evolution. Data management platforms (DMPs) are one such enabling technology.
Demystifying Data Management Platforms: What They Are and What They Do
Before we get into various features and points of differentiation, we need to establish a baseline definition of what a data management platform is, and what it does. DMPs are often described as:
- Digital data warehouses
- Customer/audience data repositories
- Digital marketing hubs
All of these descriptions have merit. One basic functionality of this technology is to ingest various sources of customer information, transform that information and efficiently store it. This functionality alone enables a vast number of other processes and marketing technologies to interact with the DMP.
Data Management Platform Shopping Guide for Beginners: 5 Key Factors to Evaluate
If a central repository of customer and audience intelligence data sounds like a need at your company (as it is for many organizations), you may want to evaluate these five critical considerations:
- Data integration capabilities
- Cookie pools
- Audience intelligence/segmentation
- Summary reporting
- Marketing ecosystem functionality
This list is far from exhaustive, but more of a starting point on a journey of understanding how data management platforms may meet various marketing needs.
1. Data Integration Capabilities:
A digital data integration hub such as a DMP must first and foremost be able to handle data, and lots of it. It is appropriate to talk about big data when talking about all the digital data available within a DMP. In addition to sheer size of data, data types are equally if not more important.
Can the selected technology handle many different types of data (e.g. 1st party, 2nd party, 3rd party) and from different data sources? To improve the omni-channel nature of the tool, integration with offline data from an in-house CRM system or customer database is another great feature.
A good DMP will treat data agnostically. Within a set of well-defined requirements, DMPs should be able to integrate virtually all data sources, though additional configuration costs may apply in some cases.
2. Cookie Pool:
In the case of cookie pools, the larger a pool is to start, the better.
I would liken the size of the cookie pool available to the DMP as to the breadth of their coverage across the Internet. The more users you have over the Internet, the higher the likelihood of matching cookies to other data sources as more information is integrated within the DMP.
Also, as DMPs tie into other digital marketing elements (such as a demand-side platforms) there will be attrition of the original pool of cookies if they cannot be matched. A good DMP will have access to a large pool of cookies, and a standardized process for “refreshing” the cookies and cleaning out old or irrelevant cookies over time. That helps ensure your information does not become stale or outdated.
3. Audience Segmentation:
Once you have loaded data into the DMP, the next question becomes what to do with it? Another bread-and-butter feature of DMPs is the ability to create customer and audience segments.
Segmentation is a vital marketing function that takes place in the analog world to provide marketers the ability to target customers with appropriate messages and offers. Targeting spend leads to fewer dollars wasted and, ultimately, higher digital marketing ROI. It also gives marketers, advertisers and publishers better insight into their audience.
For example, select information loaded into a DMP can help publishers monetize the most attractive segments of their audience at a premium price. Some DMPs offer advanced functionality for segmentation using look-a-like algorithms to expand audience segments on the fly.
4. Summary Reporting:
The future language of data will be data visualization. The old saying “A picture is worth a thousand words” applies here. However, in my years of analytics experience, I’ve yet to hear anyone say, “That table of data is worth a thousand words.” Data visualization bridges the gap so complex number crunching can convey a compelling message.
Most DMP solutions have standard reporting functions that enable some simplistic reporting and data visualizations. Some vendors are beginning to offer software solutions that tie in to DMPs and offer advanced analytical and visualization capabilities. That’s a welcome development.
The current landscape has most major players closing off their DMP from directly querying the data with a database-like tool. As things progress, more providers are likely to allow more customized reporting and querying of DMPs. For now, however, users can expect a small set of standard charts and tables within DMPs.
5. Marketing Ecosystem Functionality:
This last consideration is certainly not the least. In fact, it may be the most critical piece of a DMP.
In this sense, DMPs can function as an enabler of a broad-based marketing ecosystem – basically a central nervous system for your marketing initiatives. This is a highly valuable aspect to any DMP.
How so? Because DMPs provide a foundational ability to extend and integrate marketing automation and technology tools to provide a more comprehensive and complete marketing solution. Practically, that means marketing teams can support campaigns and servicing of customers, regardless of channel.
Just a few common areas where a DMP can enable a “smarter” use of customer/audience data include:
- Demand-side platforms (DSPs)
- Website personalization tools
- Marketing automation tools
- Enhanced customer e-commerce experiences
The basic premise here is that to automate various marketing functionality, you need data. The more data you can capture and the more robust and actionable that data is, the more likely any future efforts will generate positive and measurable returns.
This piece was developed jointly with Sam Harkness, Director Alliances at Turn.