How Does a Data Management Platform Work?

July 28, 2015
Contributor: Heather Pemberton Levy

Our mock scenario shows how a DMP interacts with a CRM, data vendors, and Web sites to deliver targeted content to loyal customers and “look-alikes” around the Web.

Data management platforms (DMPs) are to digital advertising what engines are to cars. They run your ad tech program, but they need a critical element to work: data (like fuel in cars). When a DMP runs well, it displays personalized content on websites, emails, mobile apps and informs call center scripts. It can target advertising for both your customers as well as look-alikes, segments of people with particular demographic or behavioral attributes. That’s the beauty of the DMP: It not only nurtures your existing customers but finds new ones.

Martin Kihn, research director for Gartner for Marketing Leaders, explained how a DMP works.

First, let’s outline the three primary functions of a DMP:

  1. Import data –The DMP takes structured information from a number of different systems, both internal and external, and organizes it at the individual level.
  2. Find segments – You instruct the DMP to target segments that share particular attributes such as males in Florida over 50 who use an iPad and recently browsed your website. Additionally, the DMP can access data vendors and synch up cookies and other IDs from different places to help you target the right audience.
  3. Send instructions – The DMP alerts ad networks, web sites and other places about who to target, with what message, on which channel or device.

As an example, let’s consider Luxe Trux, a fictitious auto company that wants to target males over 40, living in urban locations, who have an interest in performance ATV’s and trucks, who may be in the market for one. The company’s campaign to sell early arrivals of its newest SUV targets both a loyal customer, Terry, and “look-alikes” it can find through information imported from data vendors.

In this mock scenario, the brand moves Terry from an exploratory visit to a test drive and possibly a sale. It also brings a new prospect to its web site. With a DMP humming at the center of the marketing cycle, brands can begin to realize the power of digital advertising.

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