What is DMP Marketing

DMP - Data Management Platform - seems to be the buzzword of the hour in the marketing industry. For many companies, DMPs are indeed indispensable - but not for all.

By Berit Block, Marketing Manager Europe at DataXu
Do I need a data management platform (DMP)? This is the question many marketing experts ask themselves when assessing their marketing technology needs at the beginning of the new year. DMP seems to be the buzzword of the hour in the marketing industry. According to a global study by Econsultancy, 68 percent of marketers believe DMPs are "critical to the future of programmatic marketing." It is therefore understandable that many in the industry consider DMPs to be indispensable and their introduction to be a matter of course. This is true for many companies - but not for all.

DMP / DSP: A Brief Introduction

In the past, the functional overlap between a DMP and a Demand Side Platform (DSP) was minimal; today, most DSPs also include analysis and data management tools. Originally, the data was collected and sorted with DMPs, while the purpose of DSPs was limited to implementing the knowledge gained from data analysis, for example for purchasing digital media. If you are considering the use of a DMP, a sideways glance can be useful: Your DSP partner may be able to cover your requirements for a DMP.

When is a DMP really necessary?

There is no one-size-fits-all answer to this question. Whether a DMP is really necessary depends on the company. The answer depends heavily on the amount and type of data in the respective company. In general, a company that holds large amounts of CRM data will likely need a standalone data management platform. For companies that mainly work with behavioral data in their marketing campaigns, a modern DSP that offers data management and analysis functions at no additional cost is often ideal.
If you take a closer look at two well-known German companies, the differences become clear: Lufthansa collects enormous amounts of CRM data, which enables conclusions to be drawn about the purchasing behavior of customers in the past and can influence future purchasing decisions. When processing this data, a DMP is essential in order to be able to segment different customer groups for targeted advertising. The situation is different with brands like Milka, which primarily use digital channels for branding campaigns. If little or no CRM data is managed, the need for a stand-alone DMP is not necessarily a given. As a rule, behavior data can also be used first-hand with a DSP if it is associated with significant added value for a campaign.

Significant added value for marketing campaigns

In general, however, the data warehousing and management functions of a DMP are appropriate if CRM data and purchasing history are to be used by customers, which gives marketing campaigns significant added value.
There are other factors to consider when choosing between a DMP and a DSP with advanced data management and analysis capabilities. Marketing professionals are often taught that a good solution is to use different DSPs in parallel (one for mobile advertising, one for video advertising, etc.) and then feed all the insights gained from campaigns into their DMP. This can easily lead to data loss as not all systems are compatible with each other. The cross-device customer journey could break up into fragments and, for example, frequency capping could be impaired.

The use of a central demand side platform can be much easier and more efficient: Since no other system is interposed, data on page views by users is fed into the system in real time. It's also more cost-effective to run one system than two - if it's the right one.

For marketers assessing their marketing technology needs in 2016, these questions are a good place to start. Anyone who already relies on a DSP partner should know: It is not a problem to transfer all data to an independent DMP if the data management requirements change later and a DMP is deemed necessary.
German marketing experts should make the right decisions for themselves and their brands and only follow a catchphrase if it really helps them.