We’re living in tumultuous times in the online advertising industry! In one short decade, we’ve gone from relatively straightforward cookie-based desktop advertising, to the complex web of adtech players trying to tackle omni-channel advertising. Data Management Platforms (DMP) are designed to make sense of the massive streams of data that are generated by this complex system. Unlike advertisers and buy-side agencies who have long recognized the value of DMPs, publishers underutilize them and many do not realize how to use a DMP to its full potential. We think it’s time to fix this.
What do DMPs do?
DMPs provide services for both publishers and advertisers. They collect audience and campaign data from ad networks, demand side platforms (DSP), supply side platforms (SSP), and various other sources. Using this data, DMPs identify consumers and create audience profiles that they then feed back into the system. For example, DMPs can detect that someone has browsed for a specific make-up brand on a laptop, match this person to audience data which indicates that this person is a 20-25 year old female, and use this information to allow an advertiser to send targeted ads to her on an iPad app via a DSP.
Using DMPs is beneficial to both the buy and sell-sides of the marketplace. Tracking audiences across channels is essential for advertisers because it allows them to understand and influence the “purchase journey” of a consumer. At the same time, publishers may see upside if they can apply insights to the targeted inventory that savvy advertisers demand, which in turn, drives up price.
Ironically though, as more publishers use DMPs to capture this incremental value, their insights (relative to those of their competitors) become commoditized, and advertisers can easily access a desirable audience across many publishers. At this point, a DMP, is no longer a tool to beat the market, but a bare necessity. Now, publishers can only enjoy a competitive advantage when they apply truly unique first-party data, which is an increasingly rare asset.
So DMPs are basically imposed on publishers?
Yes, in a way they are. But those that take the most advantage of a DMP’s capabilities can still maintain an edge. The best practice here is to leverage insights from the DMP to enhance all of their business activities, rather than simply categorizing their impressions to attract higher prices from the buy side.
Okay, how does that work?
Advertisers want to target certain segments to meet specific objectives. One segment might be perfect for a specific product, another may consist of influencers that steer people’s buying behavior, and a third may benefit from more in-depth product education. Smart publishers use segmentation to drive their own content-driven business in three major areas: design, personalization, and user acquisition.
Product Design. Identifying behaviors of different audience segments is essential to maximizing value through product design. Publishers need to track users across several different channels such as social, email, and mobile. For example, an e-commerce player can discover a pattern where a typical audience segment of men between 40-50 years with high income seem to respond well to email marketing during daytime. Most likely, they are in an office environment with time to browse for something, but they are not likely to convert this to a purchase. If these same users could be reached a tablet with a push notification from a mobile app that same evening, it could be very effective in closing the deal. Alternately, based on this information, the publisher might promote wish-list functionalities on its desktop website to facilitate delayed purchases.
Increasing Engagement. Personalization efforts are richly informed by combining behavioral data with demographics and interests; this is especially relevant for content-driven publishers seeking to increase audience engagement. Serving users what they want, makes them stick around longer and view more content; this in turn creates more inventory. Sometimes, entire spin-offs are the result of identifying audience segments that share common, ancillary interests.
Expanding Audience. Perhaps most importantly, using data to inform a user acquisition strategy is key to running effective marketing campaigns. A DMP allows publishers to identify high value users and run lookalike ad campaigns to attract them. The result is a more targeted marketing campaign that results in a more engaged user base. Today, people are spending most of their time on their mobile devices, and the competition to grab user attention on these devices is growing everyday. Publishers simply cannot afford to “pray-and-spray” when it comes to their ad campaigns. They need to identify, target, and cater to their high value users.
DMPs inform many other business activities for publishers and we’ll see some interesting use cases popping up as ingestion methods and analytics continue to improve. As both marketers and publishers really start to get a hang of this whole omni-channel thing, the landscape will wonder how it ever lived without the actionable insights of a DMP.
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