Data Management Platforms (DMPs) came on the scene a few years ago and are seen by many as the savior of marketing. They say we can have a golden record for our customers. In the DMP, vendors promise that you can collect all the information you need for a 360-degree view of the customer.
The only problem is that it’s just not true.
What Is A DMP?
Let me help explain what a DMP (Data Management Platform) is and why it’s important in modern marketing.
A DMP is essentially a unified data warehouse that serves as the backbone of data-driven marketing efforts. Think of it as a sophisticated central nervous system that collects, organizes, and activates data from countless touchpoints in your marketing ecosystem.
The core function of a DMP can be broken down into three main processes:
- Collection and Integration: A DMP acts as a sophisticated data collector, gathering information from multiple sources across your ecosystem. This includes first-party data from your websites, apps, and CRM systems; second-party data from trusted partners; and third-party data from external providers. Like a skilled librarian curating a comprehensive collection, the DMP combines diverse data streams into a unified repository.
- Organization and Analysis: Once data is collected, the DMP transforms raw information into actionable insights by creating detailed audience segments and profiles. This process involves sophisticated pattern recognition and data processing to identify meaningful user behaviors and characteristics. For example, the system might identify segments like frequent mobile shoppers who browse luxury items or price-sensitive customers who respond well to email promotions.
- Activation and Distribution: The DMP functions as a data activator by making insights readily available across your entire marketing technology stack. This standardized access enables marketers to execute highly targeted campaigns across multiple channels simultaneously. Whether running email campaigns, social media ads, or personalizing website content, the DMP ensures you’re working with consistent, up-to-date audience data and insights.
The key difference between a DMP and other marketing tools is its ability to handle known and anonymous data at scale while providing standardized access to this information across your marketing ecosystem. This standardization is crucial because it ensures that whether you’re running an email campaign, social media ads, or personalizing your website, you’re working from the same consistent set of audience data and insights.
DMP Limitations
However, DMPs were originally designed around one channel: online ad networks. When DMPs first arrived, they helped websites deliver the best offers by utilizing cookies to track a person’s web activity anonymously. They then morphed into ad tech as part of a programmatic buying process, helping companies market to a specific segment. They’re great for this single purpose but begin to fail when they’re asked to do more multi-channel campaigns that utilize machine learning for a more targeted approach.
Because data stored within a DMP is anonymous, the DMP can be helpful for segmented online advertising. It doesn’t necessarily need to know who you are to serve up an online ad based on your previous web surfing history. While it’s true that marketers can link plenty of first-, second-, and third-party data to cookies housed in a DMP, it’s basically just a data warehouse and nothing more. DMPs cannot store as much data as a relational or Hadoop-based system.
Most importantly, you cannot use DMPs to store any personally identifiable information (PII) – the molecules that help create the unique DNA for each customer. As a marketer, if you’re looking to take all of your first-, second- and third-party data to create a system of record for your customer, then a DMP won’t cut it.
Customer Data Platforms
As we future-proof our technology investments in the age of the Internet of Things (IoT), a DMP can’t compare to a Customer Data Platform (CDP) for achieving that elusive golden record. CDPs do something unique – they can capture, integrate, and manage all types of customer data to help create a complete picture (including DMP behavior data). However, the degree to which this is achieved and how it is achieved vary widely from vendor to vendor.
CDPs were designed from the ground up to capture, integrate, and manage all types of dynamic customer data, including data from social media streams and the IoT. To that end, they’re based on relational or Hadoop-based systems, making them better able to handle the deluge of data that lies ahead as more IoT-oriented products come online.
This is why Scott Brinker separates DMPs and CDPs in his Marketing Technology Landscape Supergraphic. Called out in his squint-inducing 3,900+ logo chart are two separate categories with different vendors.
In his write-up announcing the graphic, Brinker points out correctly that the One Platform to Rule Them All idea has never truly come to fruition. Instead, what exists is a cobbling together of platforms to perform certain tasks. Marketers turn to one solution for email, another for the web, another for data, and so on.
Marketers do not need a large platform that does it all but a data platform that gives them the information they need to make decisions.
Marketing Orchestration
This touches on something that is just starting to emerge: a true orchestration platform. Built on CDPs, these are designed for true omnichannel marketing, giving marketers the tools to make and execute data-driven decisions across all channels.
As marketers prepare for tomorrow, they will need to make buying decisions about their data platforms today that will affect how they’re used in the future. Choose wisely, and you will have a platform that will help bring everything together. Choose poorly, and you’ll be back at square one in a short amount of time.
