Who Should Own My Data Management Platform?
Mapping out the pros and cons of data management platform (DMP) ownership - an ad tech dilemma for marketers in China.
Mapping out the pros and cons of data management platform (DMP) ownership - an ad tech dilemma for marketers in China.
Demand-side platform (DSP) is one of the hottest media trends right now, but what most people fail to understand is that it is merely a buying mechanism. The real value lies in the data management platform (DMP), which acts as the brain that tells the DSP which ad impression to buy. In the Western ad tech ecosystem, third-party DMPs like BlueKai serve as the central nervous system that various DSPs plug in for intelligence. In some instances, many Western DSPs such as Turn will often combine their own first-party data with BlueKai’s third-party data to create custom audience segments.
The Chinese Way: No Third-Party DMP
The Western ad tech ecosystem is the ideal way of operation. However, the picture looks quite different in China. Take a look at the ad tech ecosystem below:
Even though there are quite a few DMP companies listed, none of the major DSPs in the China market are actively using them. What happens instead is that all the DSPs use their own third-party data collected from direct publisher relationships. With no de facto standards in third-party DMP data, Chinese marketers have zero transparency in knowing the exact data that is being used for targeting. Hence, the local DSPs are all moving toward a strategy of a first-party DMP offering to prove their value add, and most of all for vendor lockdown. In the end, whoever controls the client’s data will control the bulk of the marketing budget. To make things more complicated, agency-trading desks (ATD) and third-party tracking vendors like Miaozhen also have a DMP offering. Of course, marketers have the option of hosting their own DMPs internally.
Everybody Is Offering a DMP, Which One Should I Choose?
There are advantages and disadvantages for each decision, I’ll map out the contender in the first-party DMP space and evaluate each option. The choices are:
1. DSP hosted DMP
2. Third-party tracking hosted DMP
3. ATD hosted DMP
4. Internally hosted DMP
DSP Hosted DMP
Third-Party Tracking Hosted DMP
ATD Hosted DMP
Internally Hosted DMP
The choice for marketers is a difficult one, as all contenders are viable. Marketers have to gauge their own options by focusing on their core business objectives. For example, leading Chinese e-commerce company Jingdong Mall (JD.com) partners directly with DSP vendor MediaV for hosting its DMP. Because JD’s main objective is to drive retargeting traffic through its already massive traffic, it doesn’t want any cookie mapping data loss from working with other vendors in this space.
Even though the Chinese ad tech ecosystem is a bit chaotic at times, brands can still make informed decisions by focusing on core business objectives.