DMP- What is a Data Management Platform?

DMP- What is a Data Management Platform?

Trapica Content Team

Marketing Guides
6 min read
May 18, 2021

When it comes to the marketing environment, it’s easy for beginners (and even those with lots of experience) to feel out of the loop when an acronym comes up that isn’t instantly recognizable. While we should all know about SEO by now, you might get confused when hearing about DSP, SSP, DMP, and various other acronyms. Today, we’re focusing on the latter!


What’s a DMP?

If you’re currently struggling to keep tabs on all the different data entering the business, this is the solution you need because the acronym stands for ‘Data Management Platform’. As the name suggests, tools of this nature are designed to bring all data sources together in one place.

As well as collecting data, these platforms help to organize and use data whether from first-party, second-party, or third-party sources. We’re constantly being told that data is the way forward with digital marketing because we can use it to improve product development, advertising, customer experiences, and more. However, this doesn’t stop us from looking at our computer screens with a confused look on our faces while wondering where to start.

Now, every marketer and business has a starting point with a DMP. This is one of the best ways to glean insights into your audience and use data to improve marketing efforts in the coming months. It’s time to turn all that raw data into something tangible with a DMP - rather than doing this manually, allow a DMP to help.

How Do DMPs Work?

After first collecting data from various sources, DMPs then organize it into something that can be actioned by the business. For example, one function is to transfer the usable data into SSPs, DSPs, and ad exchanges. If you aren’t familiar with this niche, we’re talking about supply-side platforms and demand-side platforms (and how businesses obtain and sell ad space).

Elsewhere, it’s possible to use the actionable data for targeted advertising, content creation, personalization, or to boost the consumer experience. Many businesses see tools like this as the link that has been missing for so long. These tools connect various aspects of the digital marketing world and get systems to work in harmony, something that previously required lots of manual effort.

In terms of the collection process, some common points from which the tool draws data includes:

  • Mobile apps
  • Websites
  • Web analytics tools
  • Point of sale systems
  • Social media
  • CRM platforms
  • Offline
  • TV
  • Online video

Normally, the easiest data for a DMP to collect comes in the shape of first-party data, and this is data that the business collects itself from customers. It’s interested in video uploads, clicks, downloads, interests, demographic information, and more. Depending on the platform (and your goals!), it can also deal with influencer and socio-economic data.

As an example, let’s say that you want to use a DMP to improve the targeting of ad campaigns. After collecting lots of data, the DMP processes it and comes out with insights on the other side. You might find that the best market is single men aged between 30 and 55.

We know what you’re thinking, and you’re probably asking why you should think about DMPs when you already have intricate marketing systems installed. Well, this resolves several of the biggest problems experienced by marketing teams - namely, the processing of data and the isolation of various marketing processes. Not only does a DMP process data more efficiently than anything you’ve tried before, but it also brings together several components of your marketing strategy.

Uses of a Data Management Platform

Collecting data is one thing, but you need to actually use it to generate a return on the investment. After spending time choosing a platform, which is something that trips many people up. In truth, DMPs have lots of functions. You can use the platform to:

  • Tailor product and content recommendations to users across mobile and desktop.
  • Improve the targeting of ad campaigns both on social media and search engines. DMPs process audience data and provide a deeper understanding for advertising purposes. You’ll improve the content, messaging, targeting, and other parts of your ad campaigns.
  • Synchronize the targeting of ad campaigns across all the different channels - ensure that you have the right audiences for digital ads, TV, and even offline advertising.
  • Use audience data to highlight prospective new customers. This helps to generate more revenue and grow the business as a whole.
  • Accumulate all data ready to sell for even more revenue.
  • Inform SSPs and DSPs for those operating in the advertising space marketplace both now and in the future.
  • Learn more about an audience to boost engagement through social media posts and blog posts (and all other content). The information learned through data management platforms can also be implemented for product development.


Should You Use a Data Management Platform?

Is this solution designed for a particular audience? Should you be a certain size before taking advantage of this technology? No and no. Ultimately, every business of every size and every industry should benefit from using a DMP in some way. As you can see above, it’s possible to implement the platform in lots of different ways, so it presents a good investment whether you use it for one purpose or several purposes.

There are other ways to learn about your audience and compile data, but none are more effective and efficient as a data management platform. As long as you use the tool correctly, you’ll start using data to make more informed decisions all around the business - this sensible decision-making shouldn’t be restricted to small or large companies.

DMPs are one of the rare services that help everybody from publishers to agencies to marketers and beyond. On one side, publishers use these solutions to collect audience data from ad campaigns as well as all websites. Over time, it improves the effectiveness of programmatic and direct-sold inventory by boosting CPMs.

On the other, agencies and marketers need to understand their audiences to survive in competitive environments. By collating various data sources, there’s a richer and deeper understanding of the audience, and this helps in many different ways. As one example, marketers can use the new-found audience understanding to find new prospects with the potential to convert. By making sense of the data, it allows marketers to always meet the right people with the right message at the right time.

Building an Audience

Throughout this guide, we’ve waxed lyrical about the abilities of a DMP to build audiences and inform much of the marketing strategy. But how do you build an audience in the right way? What are the best data points to include in this process? If you don’t have this information, you’ll struggle to get a positive ROI from a DMP.

Every business has different data points to build their audience, but some of the most common include browsing history, gender, age, household income, family size, location, interests and hobbies, social networks, and opinions. Of course, you’ll need to think about the data points that make your customers unique. What features does your audience have that make them different from everybody else? Once you isolate these features, it’s easier to leverage the DMP to work in your favor.

What about those who don’t have access to an abundance of first-party data? Often, companies with little first-party data think that they can’t use tools like DMPs. Don’t worry, this isn’t another party that you’ll be watching through the window as everybody else has fun. Instead, the tool should have access to third-party and second-party data to supplement your own.

The Four Steps of a DMP

To finish, we briefly want to cover the four main steps of a DMP to explain how it works from start to finish.

Step 1 - Collection and Organization

Firstly, your chosen DMP will collect data and then organize it into various categories. Don’t worry, you have full control over how the platform organizes data.

Step 2 - Segmentation

Next, you can build audiences from the segmentation that takes place on the platform. For advertising, you may need an audience of women between the ages of 21 and 34 with an interest in sports, for instance.

Step 3 - Insights

The more data you have, the more likely you are to spot patterns and trends, and this is what happens during the third stage. With audience profile reports, the technology scans through the segmented data to pick up on certain patterns, and this further assists in building an audience.

Step 4 - Activation

Often the scariest step for marketers, you then put the data into action. This has different meanings for every business or agency whether you want to create content, improve ad targeting, change the product/content recommendation system, or do something else with the insights.

Marketing Guides
6 min read
May 18, 2021