Data-Driven Marketing is in the Details
In today’s world, crafting a data-driven marketing strategy is critical for any organization. To that end, most marketers turn to data management platforms (DMPs) to help them deliver and execute their respective strategies. According to the Nielsen CMO report, 63% of marketers in the U.S. consider DMPs one of the top three most important marketing and measurement technologies.
Given this demand, it’s not surprising that the DMP marketplace is crowded with hundreds of vendors claiming that they have the bells and whistles marketers need to succeed in the data-driven world we now operate in. But with so many vendors fighting to stand out, it’s no surprise that many marketers aren’t able to truly differentiate the competing solutions. And to be fair, from an eagle’s eye view, I don’t know that there is a way to.
If you look closer at the details, however, you’ll find that not all DMPs are created equal. Underlying fundamental differences still separate DMPs from one another, and when marketers know what questions to ask, they can break through the buzz words and marketing lingo to identify which DMP is truly the right fit for their needs. There are many use cases and features that can differentiate DMPs, especially across different verticals and industries, but there are a handful of core functionalities that all DMPs must have, and marketers should evaluate them closely as they go through their buying decisions.
How fast can the DMP organize my data and make it actionable?
In order to be considered a DMP, a platform needs to be able to ingest and centralize first-party data. The question that marketers must ask themselves, however, is “Can my DMP perform at the speed of my customer?” Allow me to elaborate; most DMPs will ingest customer data in real-time; however, not all DMPs process the data at the same speed (i.e., as soon as they receive it).
Even though a DMP has ingested a data signal, it still needs to attribute the signal to the right user and its associated segment(s) for proper activation. Some DMPs are capable of processing data in real time, yet some only process data on an hourly or daily basis. To marketers, such as those in e-commerce, processing time can be the difference between converting a prospect and not converting. For example, let’s say a consumer visits an e-commerce site and shops for a particular product. If the user doesn’t convert, the e-commerce site should be able to re-target this person with a promotional ad. If the person continues browsing the web for competitive products within the same hour, day, etc., and the e-commerce’s DMP can’t react quickly, then the company loses a prime opportunity to remain top of mind and convert the user.
The speed at which a DMP can identify and reach the right people is also crucial. It can mean the difference between maximizing or wasting your ad dollars. In the auto market in particular, suppressing ads during a campaign to consumers after they’ve made a purchase is essential to minimizing ad waste. Once a prospective customer has purchased a vehicle, any additional ad exposure would be considered a waste. For this reason, it’s vital that a DMP can analyze new data signals and execute on them as they come in. The longer it takes a DMP to identify and communicate that a particular buyer should be excluded from a certain media campaign, the more likely it is that you’ll be throwing money out the window and delivering irrelevant ads.
What are the permissible use cases for my DMP?
But DMPs aren’t just for analyzing and acting on first-party data. They also need to connect marketers to rich second- and third-party data sets that can be used to scale and enhance any of marketing tactics.
Simply put, there are four different use cases in which marketers can use data:
- Measurement, and
- On-site personalization
Can I activate my data strategy across the channels I need to? If yes, how much of it?
A data strategy can’t be considered successful if it doesn’t actually help you reach your prospects. A DMP acts as the connective tissue between the customer a marketer wants to reach and the media platforms that actually reach them. Ensuring that a DMP is integrated with the platform you run your media on is necessary to evaluate a DMP’s ability to activate your data. The second and most important step is understanding the overlap between the DMP and the various media platforms that exist. Every DMP and media platform maintains their own unique identifiers in order to label the users it sees across its network. This creates a fragmented ecosystem where DMPs must constantly maintain an ID sync with the marketers’ preferred media partner in order to transfer data. Overlooking the extent of the overlap can instantly hinder the scale and ROI of any data strategy regardless of whether it was good or not. For instance, if you have identified 10 million potential customers you want to target, but due to a minimal overlap between your DMP and the platform you’re running on can only reach 5 million of them, you’re losing critical reach. That’s why it’s critical to work with a DMP that can reach your customers at scale regardless of which vertical you operate in.
Can I measure and optimize the performance of my DMP tactics in real time?
Proving ROI is key to any investment, including DMPs. While many DMPs have pre-baked measurement applications, such as global frequency capping, audience verification reports and funnel tracking analysis, a more robust application is needed to measure quantifiable outcomes. Most commonly used measurement applications include multi-touch attribution (MTA), as well as brand/sales effect studies, all of which need to work alongside your DMP
Regardless of which measurement application you choose, it’s critical that any insights that you derive are dynamic instead of static. In other words, being able to understand your performance makes you a smart marketer, but being able to understand your performance and then leverage it for continual optimization makes you a brilliant marketer. To illustrate how this would work, let's say that you opt into an MTA solution alongside your DMP. Through your MTA application, you are able to understand which audiences and channels performed best for your given campaign. Imagine if once the campaign is over, you are then able to transfer user-level data from your audiences/channels to better inform you next marketing campaign in real-time.
What level of customer support will I receive for my investment?
For many companies, implementing a new SaaS (software as a service) solution is like learning how to drive all over again. As many of us would remember, learning how to drive required first reading and learning the rules of the road and then getting hands-on experience with a driving instructor. Learning how to operate a DMP is very similar. While every DMP comes with its own manual, it’s critical that advertisers who are journeying down the path of a DMP have personal support that guides them through the specific challenges of their business. More importantly, personal support needs to be available and accessible without ridiculous upcharge fees. If you are charged every time you have a question or need to send an email to the vendor, a DMP investment can instantly go from positive to negative.
While every marketer will have their own data-driven approach, knowing to ask the right questions will make sure that they head down the correct path toward achieving their goals—and enjoy the journey along the way.