3 tips to catch that ROI when taking a leap into the DMP

I was first introduced to the acronym DMP (Data Management Platform) three years ago on a call that had participants across Marketing, Consumer Experience, Data Science and Digital.  The group's understanding about the DMP seemed to be across the spectrum.  Some attendees equated it to a DSP (Demand Side Platform) while others thought it was an identity resolution database. It turns out it's neither.

With the turn of the year, the DMP remains one of the top trends for marketing in 2019. Yet if you can relate to the confusion laid out in the opening paragraph then this article provides (i) A brief explanation of the DMP and (ii) Three tips to optimize your advertising ROI if you are thinking of leaping into the DMP.

So what exactly is a DMP?

A DMP has been defined by Forrester as "A unified technology platform that intakes disparate first-, second- and third-party data sets, provides normalization and segmentation on that data, and allows a user to push the resulting segmentation into live interactive channel environments.” While this definition makes perfect sense now, I don't think most of us understood it fully at the beginning of our journey.

In layman's terms, I would describe the DMP as a cloud based software solution that integrates audience relevant data at a cookie level to create target segments, which can be leveraged for advertising, onsite personalization, cross-channel marketing and so forth.

What is audience relevant data? It is any data that can help you drive your customer or prospect engagement. Examples include but are not limited to -- purchases, solicitations and related tracked behavior, offline contact points such as store visits or call center, advertising touch-points such as impressions and clicks, and so forth.

The DMP is an audience management and activation solution that needs to be driven by your core segment strategy. It can be very powerful if harnessed with accurate data, insights from your segmentation analytics and accompanied with a content and touch-point strategy for those audiences.

And now for the three tips to help you with your DMP journey...

1. "Accurate" and "Significant" volume of first party data is gold for DMP use cases to generate ROI

Whether you choose to target your customers (existing or past) for cross-sell, up sell, re-acquisition or want to find like prospects to scale your business, it is important to have a significant volume of customers with 'good quality' data. The emphasis here is on accurate Personally Identifiable Information (PII) as it enables the offline to online match rate.

What might you ask is 'significant' volume?  This was a topic of much discussion when we started with the DMP. It is important to understand customer record quality and counts in the context of your use cases. Not to be fictitious but there is no magic bean that will grow the customer beanstalk overnight after the purchase of a DMP.  

Tip: The quality of the records will drive the offline to online match rate, which is traditionally 40-50%. In terms of volume, 'the more the better' is a good mantra in context of your campaign’s media costs.

Based on our experience, utilizing refreshed and cleansed customer records improves the person (PII) to cookie match rate for the first party data by over 50% in comparison to the traditionally advertised match rates.

2. A data on-boarding solution is critical to activate offline audiences for digital advertising through a DMP

The DMP does not store PII and it is not the originator of the cookies that are required to target audiences that have traditionally engaged through a non-digital channel. You will need to load the PII and segment relevant traits for the records into an 'on-boarding platform' to find matching online cookies that are then directly pushed into the DMP.

Tip: Plan on evaluating and budgeting for an on-boarding platform in parallel to a DMP solution if you want to activate your audiences for online advertising (for e.g. LiveRamp, Oracle Data Cloud, etc).

The good news is that the inability to store PII in the DMP is music to the ears of your Privacy Office given the data privacy breaches. This doesn't absolve companies from complying with privacy laws to ensure that the data you feed into the DMP is compliant but that's a topic for another article. 

3. Wrap your arms around the concept of identity resolution or in other words data loss

Once the cookies are transferred into the DMP from the on-boarding platform, they are segmented in accordance with your target strategy and syndicated to the DSP(s). This usually translates into audiences (cookies) having to traverse platforms owned by different vendors, which requires identity resolution across them.  Cookie matching across DMP - DSP platforms can range from 30-60%, maybe 80% depending on your use case.

Tip: Whiteboard the criteria for the end-to-end identity resolution with your proposed DMP vendor, the on-boarding partner and the DSP vendor(s) as they are all key stakeholders in this journey.

Identity resolution is a complex topic and so you will find that having a collaborative live discussion with the vendor partners can save a lot of unnecessary "ah ha" moments post purchase. We raised the concern around lack of clarity about match rates with Forrester through a few discussions that gave light to the issue in a 2018 report titled “Q&A: Everything Marketers Need To Know About Match Rates”.

In conclusion, there is no software selection process that will bring out the answers for the questions you don’t know to ask. The goal of this article has been to arm you with those tips because the ROI from the DMP can bring efficiency to your acquisition cost and as Adweek reported this week, digital continues to engage audiences at a faster pace than offline. 

Hope this is helpful in your quest to leap into the DMP in support of your segment strategy. Please reach out with any questions or share your tips.