What is a data management platform (DMP)?

Simply put, a DMP is a platform that helps you collect, organise, and activate data from various sources and put it into a usable form. Although DMPs can ingest and manage different types of data, they’re typically used for non-personally identifiable information.

As your customer data accumulates, finding smart solutions for managing and storing that data becomes an essential task. But the right data solution goes beyond just management and storage. DMPs not only help you solve the challenge of collecting and managing complex data sets from all your sources, they also analyse your data for actionable insights, facilitate external data purchase and transfer, and connect with third-party ad networks and exchanges for targeted advertising purchases.

However, DMPs do have some limitations, so it’s important to investigate if a DMP is the right data storage and analysis solution for your company. Depending on the type of data you are working with, your needs may be best met with a different type of data storage system.

What can I do with a DMP?

A DMP gives you several ways of putting insights from your data into action:

• Ad targeting. Identify your audience profiles and position targeted ads directly to the customers who will be most impacted.
• Personalised experiences. Develop content and experiences specifically tailored to your segmented audiences.
• Communicate with other platforms. Connect directly with ad exchanges to purchase targeted ad placements.
• Data monetisation. Purchase, collect, and analyse second- and third-party data, and sell your own data as second-party data.

What types of data can I manage with a DMP?

You’re able to collect and analyse three different types of data with a DMP:

First-party data

Your first-party data includes any information that you have collected through a direct relationship with a customer. This data includes things like email addresses, behaviours, demographics, and purchase histories. First-party data can be collected directly from customers via forms, sign-ups, and direct interactions, but it is also often gathered via pixel tracking, cookies, and device IDs.

Although DMPs can and do collect and analyse your first-party data, they only do so for the purposes of generating anonymous user profiles and audience insights. First-party data is primarily managed with a customer data platform (CDP), which collects and organises all of your first-party data and can then provide it to your DMP to be incorporated into your audience profiles.

Second-party data

Like first-party data, second-party data generally includes information about customers and their behaviours, and is collected via direct interactions, pixel tracking, or cookies. The main difference is that the data is collected firsthand by a different organisation—not your own.

Second-party data offers you the opportunity to look outside your current customer pool and get information about wider audiences that you may be interested in marketing to. Second-party data can be purchased or exchanged between companies via mutually beneficial agreements. The actual exchange of second-party data is facilitated through DMPs.

Since a DMP can’t run on first-party data alone, second-party data can be used to supplement and scale your first-party data, which allows you to start building audience profiles and generating insights, even if your current customer pool is too small for large-scale analysis.

Third-party data

Third-party data is data collected from a variety of sources, packaged together, and made available for purchase. Essentially, large data aggregators purchase first-party data from publishers and other data owners and collect it into large data sets, which they then make available for purchase through DMPs. Third-party data is used to supplement your first- and second-party data to add even more depth and precision to your customer targeting profiles.

How do I analyse my data with a DMP?

Analyse and act on your data in four stages with a data management platform:

• Collection and organisation. Use your DMP to collect all your first-party data and acquire second- and third-party data. Your DMP will then organise all your data into categories and taxonomies based on the business goals and marketing models that you specify.
• Identification of audience segments. Your DMP will analyse your data and generate audience segments that accurately represent your customer base across a broad range of channels, based on a variety of shared characteristics.
• In-depth data analysis. Use your DMP to connect with other analytics tools for deeper audience analyses and even more in-depth insights. This can help identify new potential audiences and inform future development and content decisions.
• Data transfer. Act on the insights and audiences generated from your data. Use your DMP to connect with ad exchanges, supply-side platforms (SSP), and demand-side platforms (DSP), and purchase targeted ad placements. Package and sell your first-party data as second-party data with your DMP.

What are the limitations of working with a DMP?

While there are benefits to using a data management platform, there are some instances where its capabilities fall short of other data analysis options.

• Long processing times. Because of the level of analysis involved, DMPs typically require longer processing times for ingestion and analysis of new data. Unlike with a CDP, data in a DMP can’t be viewed in real-time.
• Short data retention time. Because DMP data often relies on cookies, data retention is typically only 90 days.
• External data requirements. A DMP can’t run on your first-party data alone, so you’ll usually need to purchase additional data to use one.
• Black box computing. Although you can view the insights generated by your DMP, you’re not always able to directly view the data the insights were generated from.
• Lack of personalised marketing. Customer profiles are only based on attributes, not individual identities. You can advertise to audiences based on your customer profiles, but you can’t keep track of or run targeted ads to individual users with a DMP.

What‘s the difference between a DMP and a CDP?

If you need a solution for storing and analysing large collections of second- and third-party data as well as facilitating external data collection and transfer, data management platforms have the capabilities you require. However, if your primary need is to store and analyse just your first-party customer data, a CDP gives you access to the data storage you need, along with some additional benefits.

While a DMP’s primary use is to segment and categorise your customers anonymously for advertising purposes, a CDP helps create persistent customer profiles. This means that you can create a single, individual record for each one of your customers based on a unique identifier such as their name, IP address, or email address and access all available data for that customer under their individual record.

The ability to build these persistent customer profiles with a CDP gives you a way to organise and access your personally identifiable customer data for actionable use. In addition, you can use a CDP to organise your first-party data and provide it to your DMP to determine your audience profiles.