Does My Company Need a Data Management Platform (DMP)?
Data Management Platforms add a tremendous amount of value to digital advertising campaigns, allowing marketers to collect, aggregate and utilize data from first and third-party sources to improve advertising targets, adjust creative strategy on the fly and optimize marketing results.
But does every company need a DMP?
This article reviews what a Data Management Platform is, how they work, what benefits they offer and whether or not your company may want to license one for your advertising needs.
If you’re struggling to make the right decisions about your data strategy and marketing direction, MatrixPoint can help. We’re not just experts in DMPs, we also provide a full suite of consulting services, including sales and marketing consulting, media consulting, ecommerce consulting, data privacy compliance consulting and data analytics consulting services.
If after reading this article you’re still not sure whether or not your company truly needs a DMP, then please feel free to get in touch with us for a free consultation.
What is a Data Management Platform?
Data Management Platforms allow marketers to collect and analyze data about their customers, including behavioral data, geographic data and profile data, which can then be used to make better decisions about marketing strategies and tactics.
DMPs allow you to aggregate and utilize data from all of your varying data sources in a single location, combining first-party and third-party data under a single platform, which significantly improves your ability to optimize marketing efforts.
Properly configuring your DMP means you’ll be able to improve your marketing campaigns with real-time optimizations, ensuring that you’re targeting the right audiences at the right times, serving them the right creative and delivering the best possible results.
How Do Data Management Platforms Work?
Data Management Platforms collect all the data your company generates, including data from your website, mobile app, and other online marketing campaigns, but they can also combine traditional data aggregated from retail stores, call centers and other sources, ensuring you’ve got every single piece of data housed under the same system, which makes your data far more effective for marketing purposes.
Once all of your data has been aggregated within the same platform, the DMP can then create what’s called a “lookalike audience”, which is a model of your ideal target consumer.
The lookalike audience takes all of your data into account, determining your customer’s average demographic, behavioral, geographic and data elements to build a model of exactly who you should be targeting to generate the best marketing results.
Modern DMPs make it possible to create a whole series of lookalike audiences, allowing you to build several different consumer targeting segments, which you can use to guide your marketing strategy, and seek out new customers via well-targeted online advertising campaigns.
Data Management Platforms don’t just help with the audience targeting part of the advertising process. They also monitor consumer response data to further refine and improve lookalike targets based on results of your digital campaigns, meaning that they create a closed loop that lets you test, refine and optimize your campaigns in real-time.
Each time the loop is completed, your targets should get better, your results should improve, and your campaign’s ROI should increase.
Benefits of Data Management Platforms
Simply put, Data Management Platforms help marketers do a better job of understanding their customer demographics and psychographics, allowing them to better utilize the data their marketing campaigns collect so they can improve ROI.
DMPs are all about efficiency and optimization, as they help you build more intelligent target audience segments so that you can generate better results for your advertising efforts.
Using a DMP could help reduce your marketing spend by increasing the efficiencies of your campaigns without sacrificing leads or sales, or it could help you increase leads and sales without having to increase your budget.
If you’re looking to improve the results of your digital advertising campaigns, then connecting them to a DMP may be one of the most effective ways to accomplish that objective.
Does Your Company Need a DMP?
DMPs are incredibly powerful tools that can provide a massive boost to digital marketing campaigns, but Data Management Platforms don’t help every marketing campaign.
First, DMPs aren’t going to improve your marketing results if you aren’t running at least some portion of your advertising digitally.
If you aren’t spending any of your marketing campaign online, or if you’re only spending a small amount digitally, then a DMP probably won’t help much since it’s most effective at optimizing digital strategies.
You could use a DMP to help build lookalike models that you then use for traditional advertising targets, but it’s debatable whether or not this would be an efficient use of the platform.
Second, DMPs will only provide a significant benefit to marketing campaigns when they’re able to access the first-party and third-party data that they rely on for building effective lookalike audiences.
If you don’t have access to consumer first-party and third-party data, then licensing a DMP isn’t going to do much for you, since these platforms rely on that data to help create their audience targeting insights.
Third, just getting a DMP doesn’t necessarily mean that you’re going to be able to generate additional value, because you have to set that DMP up and utilize it appropriately in order to realize the benefits that they provide.
This is the reason it’s so important to have an expert on Data Management Platforms and general data strategy available to help ensure that your marketing, media and data management practices are generating the best possible results.
If you want to generate real value from leveraging the DMP strategy, you need an experienced marketing professional on hand to ensure the DMP is configured to receive all the data it needs to produce the insights it generates, and then to ensure that those insights it produces are utilized to power your marketing strategy.
And this is precisely where MatrixPoint can help.
How to Maximize Your Marketing ROI Using a DMP
MatrixPoint’s marketing, media and data consultants can help ensure that your company makes the right decisions when it comes to leveraging a DMP.
Not only will we help you determine whether or not you need a DMP, but we’ll also help you select the right DMP for your specific needs, guide your team on configuring it properly and train your team to utilize it effectively to ensure that the DMP generates the best possible results.
Ready to schedule a consultation with MatrixPoint’s data modeling experts? Contact us now to learn more about our data modeling consulting services.