management platforms: Why are we concerned //

Every digital marketer’s most valuable asset, data, is left behind by consumers who buy products and services online. This amount of data is useless if it’s not collected, organized, and used.

Data management platforms (DMPs), are here to help. DMPs enable marketers to better understand their customers and their buying habits. This allows for more effective marketing campaigns, which result in higher sales and engagement. DMPs allow marketers to gain insights into which campaigns are delivering the most results for their target audiences.

This article examines data management platforms in detail — what they are and why they are so important. It also discusses their future in a privacy-focused environment.

Tables of Content

• 
  What’s a data management platform?
  
• 
  DMPs vs. CDPs
  
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  Data protection laws
  
• 
  The future data management platforms
  
• 
  Additional resources
  

Estimated Reading Time: Minutes

What is a data management system?

Data management platforms are exactly what their name implies. It’s a digital platform that allows businesses collect, store, and organize data. This data can then be used to drive business decisions such as marketing. Data management platforms (DMPs) collect data about:

• Customer demographics.
• History of purchasing.
• Clicks on websites
• They fill out the online registration forms.
• Other sources.

The data is then divided to give businesses actionable insights and a clear understanding about customers and their buying habits.

DMPs may use both first- and second-party information, but they heavily rely upon third-party data that is available online. It is important to understand the differences between data sources.

• First party data refers to information collected directly from your audience. This includes website clicks, social network followers, comments and likes, email addresses, and email addresses. It is considered highly valuable as it was collected directly from your audience, ensuring greater accuracy and availability.
• Second-party Data is data that has been collected by someone else and then sold to you.
• Third-party Data is collected by entities that do not have a direct relationship to the consumers whose data it is being collected.

DMPs can organize data into segments to help marketers build targeted audiences. These audiences could be defined as people who fall within certain buying behaviors or demographics. A variety of data points can be used to create audience segments, including family size, household income, and age.

DMPs often have reporting capabilities that allow you to analyze audience data in order to identify patterns and understand customer behaviour. DMPs store large amounts of anonymous data (via cookies or IP addresses), which allows marketers to see 10,000 feet and create generalized audience profiles.

DMPs vs. CDPs

Brands and businesses have other options to harness the power of data. Customer data platforms are similar to DMPs. They collect, organize and present actionable insights.

One difference is that CDPs use only first-party data. They also collect and store personal identifiable information (PII) about customers. CDPs link the data points collected back to the individual user, giving customers and their behavior even more insight.

DMPs can be used to tell marketers that someone in a certain age group searched for products for women and was interested in running shoes and workout gear.

A CDP can tell you the user’s name and address. CDPs do not rely on third party data (i.e. third parties cookies) to gather information. Privacy and consent issues are also less important than those associated with DMPs that collect and use third-party personal data.

Data protection laws

Marketers should be aware that legislation is similar to the EU’s General Data Protection Regulations (GDPR), and the California Consumer Privacy Acts (CCPA) which protect consumers in relation to their personal data. It also provides guidelines for businesses that use or share that data.

Consumers are more conscious of online privacy issues and expect transparency regarding how their data is used. Marketers need to be cautious and prepared for the changes in their tools and strategies, including DMPs.

Data management platforms in the future

Google’s plans to eliminate third-party cookies by the end of the second half 2024 are central to privacy discussions. These cookies are used by advertising companies to track web visitors and gain information about their purchases.

DMPs have relied heavily upon third-party data in the past to fill their pipelines. A future without third party cookies would require platforms to gather customer information from other sources such as point of sale and social media.

Many believe that DMPs will soon be redundant in an online environment where third-party cookies are not used. This is because marketers are increasingly switching to CDPs. However, it is probably premature to predict that these platforms will disappear anytime soon. As the debate on data privacy and third party cookies continues, DMPs are likely to evolve.

One solution is to pivot more fully to first-party information. Lotame’s next-generation Spherical platform is one example of a DMP that primarily uses first-party data. The benefits are well-documented.

Marketers and brands should continue to work together to create customer experiences and provide reasons for customers and prospects to connect. All of this will ultimately increase the quality and quantity of data collected.

Dig deeper

Do you want to know more?

• Find 6 data collection strategies for marketing in the cookieless.
• The report by Kim Davis, MarTech Editorial Director, explains the future of data management platforms during the CDP era.
• This MarTech story explains what the third-party cookie withdrawal means for marketing campaigns.
• Learn how to leverage AI and machine learning to improve marketing data management.

MarTech first published the post Why do we care about data management platform.