How to Select a Bulletproof Data Management Platform

  |  January 31, 2012   |  Comments

A shopping guide for a DMP.

With the holidays behind us, we've all seen the countless guides for stocking up on everything from clothes to cars to European vacations. But for thoughtful marketers looking to invest in faster, better, and cheaper technology tools…well, actually, there's a lot of information out there as well. It's just often confusing, incomplete, and more obtuse than deciphering the latest financial meltdown.

And now, just when you were getting comfortable with using real-time bidding (RTB) and demand-side platforms (DSPs) for your digital media buys, you've probably caught wind of the latest trend - the DMP. Short for "data management platform," a DMP is a holistic solution that provides universal connectivity across all data relevant to digital marketers - think no more silos.

The DMP accomplishes this in two ways - by providing audience data that enables more precise targeting and enabling new types of analytics such as attribution that power smarter optimization decisions.

And while DMPs often go together with DSPs, there are differences. While DSPs provide a solution for real-time bidding, a DMP provides intelligence across the entire digital mix - think publishers, networks, search, video, mobile, social, and distributed content. So just because the RTB geeks are the ones talking a lot about DMPs, it does not mean that the DMPs are less important across other digital tactics.

Shopping for a DMP is no different than shopping for a car. You really need to know what you're looking for before you step into the showroom. With this in mind, we've prepared a quick shopping guide to serve as a starting point for first-time DMP buyers. And while the following tips won't necessarily prepare you to go mano-a-mano with your local analytics geek, they should point you in the right direction.

The key criteria for selecting the right DMP is universality. You'll need this so that you can anticipate all the twists in the road. Basically this will keep you out of the ditch.

Tip No. 1: Universal Access to Audience Data

The DMP should have the ability to integrate all sources of audience data. The idea here is simple: the more you know about your customer, the more exact your targeting, the higher the ROI. So you'll want your DMP to have access to audience data from all possible sources - online and offline, first party, second party, and third party.

The benefits of a holistic approach are evident throughout our daily campaign work. Clients that have successfully tackled the data connectivity challenge leveraging our agency's DMP have seen CPA improvements often exceeding 2x to 3x.

Tip No. 2: Universal Reach

Now that you have all your data ducks in a row and your phenomenally precise audience portrait is in hand, the next challenge is to reach this audience across an ever-growing universe of media outlets.

Which leads us to tip 2: your DMP should have the ability to target audiences across all sources of display and video inventory including exchanges, networks, and publishers. The rationale for universal reach is simple - the more media you see, the better you are at finding your optimal audiences, the higher the ROI. Or to put it simply, if you go through the effort of developing your perfect audience portrait, you might as well take every chance you get to serve an impression to the cookies that meet your exacting criteria.

Tip No. 3: Universal Management and Analytics

As mission control for the entire digital media buying process, it's crucial that your DMP provide seamless insight across the entire digital mix. So the DMP needs to see all the exposures across media and site. Such fundamental media management constructs as frequency, attribution, and creative sequencing depend on this.

So the DMP's tagging solution must be accepted universally across publishers, networks, and exchanges. If your digital brain does not see what's going on across your media mix, you can't do anything about it. And you don't want a digital brain with built-in blind spots.

Conclusion

All of this sets a high - yet achievable - expectation for DMPs:

  • Centralize all audience data.
  • Deploy target audience profiles across all inventory outlets.
  • Enable tracking, analytics, and optimization across the entire media mix.

The key to success is understanding the relationships across the ecosystem of relevant players:

  • For example, can a DMP offered by a data seller provide access to all third-party data or will some data providers shy away from such a solution because of a perceived conflict of interest?
  • Similarly, if the DMP is brought to market by a traditional DSP vendor, will publishers and networks accept these DMP tags or reject them as a Trojan horse strategy from a competitor?

Navigating these questions should be a central part of your DMP assessment. And while it may not be as fun as buying a new car, choosing the right DMP can make all the difference in determining whether you spend 2012 cruising through the media buying carpool lane; or conversely, mired in gridlock and gazing enviously at the carpoolers zipping ahead.

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ABOUT THE AUTHOR

Eugene Becker

Eugene Becker is VP, analytics for Xaxis. Eugene leads the development and deployment of the data management platform and analytics suite on a global basis. He is responsible for creating insight applications that link disparate data and empower Xaxis clients to realize break-through efficiencies.

Prior to joining Xaxis, Eugene held a similar role as the director of analytics for the Media Innovation Group (MIG), a WPP company. He was responsible for creating new applications based on user-level data and managing day-to-day analytics operations and strategy for the MIG.

Earlier, Eugene was senior vice president of analytics at McCann Worldgroup where he drove innovation in digital analytics and built scalable platforms for data visualization and cross-channel optimization. His experience spans strategy consulting, database marketing, market research, and advanced analytics, serving a roster of blue chip clients including Pfizer, Intel, Exxon, Sprint, and Diageo.

Eugene has a B.A. and M.A. in economics from Northwestern University where he specialized in regulatory economics, econometric analysis, and game theory.

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