WTF is a data management platform?

This is the latest in a series of articles that explains, in plain English, new technology tools and platforms that are changing the face of digital media. Our first entry covered DSPs. To suggest new entries, please email me at the address below.

Data now informs almost all aspects of digital media, and data management platforms have emerged to help marketers, publishers and other businesses make sense of it all. Here’s a primer — in as plain English as possible — on what DMPs are, and what they actually do:

What is a data management platform ?
In simple terms, a data management platform is a data warehouse. It’s a piece of software that sucks up, sorts and houses information, and spits it out in a way that’s useful for marketers, publishers and other businesses.

This sounds like a database. Is it more?
In theory, DMPs can be used to house and manage any form of information, but for marketers, they’re most often used to manage cookie IDs and to generate audience segments, which are subsequently used to target specific users with online ads. With the rise of ad tech, advertisers now buy media across a huge range of different sites and through various middlemen, including DSPs, ad networks and exchanges. DMPs can help tie all that activity and resulting campaign and audience data together in one, centralized location and use it to help optimize future media buys and ad creative. It’s all about better understanding customer information.

Got it. But this sounds a lot like what a DSP does.
A DMP is used to store and analyze data, while a DSP is used to actually buy advertising based on that information. Information is fed from a marketer’s DMP to its DSP to help inform ad buying decisions, but without being linked to another technology, a DMP can’t actually do much. On the publisher side, DMPs can also be linked to supply-side platforms and other technologies that can help them sell their ads for more. In those cases, the DMP is storing publisher information on its readers.

They still sound similar. Why are DSPs and DMPs separate, then? 
Have you seen the Lumascape? But that’s for a “WTF Are VCs Doing?” feature. Like many areas in advertising technology, the lines between DMPs and DSPs are beginning to blur. A growing number of DSP providers now offer their clients DMP technology too. Those companies say it’s easier and more efficient for marketers to use one platform instead of two. The counter to that argument is that standalone DMPs make marketers’ data more portable, making it easier to feed into a wide range of DSPs.

Who uses DMPs?
Agencies, publishers and marketers all use DMPs. Agencies use the technology to collect and analyze the data collected from their client campaigns, which is sometimes pooled across multiple clients to create vast and rich datasets. In an attempt to take closer control of their data, some clients have begun licensing their own DMP technologies and managing those platform themselves. Meanwhile, a growing number of publishers are also making use of the technology as a way to help them better understand their reader information and extract more value from it as a result. Think of how The Wall Street Journal’s user information is valuable for an financial-services ad campaign targeting high-net-worth individuals.

What are the major DMPs?
Vendors that sell DMP technology to the digital media world currently include Adobe, Krux, Lotame, Aggregate Knowledge, BlueKai, CoreAudience, Knotice, nPario and X+1. Some of those providers also offer DSP technology.

OK, can we address SSPs now?
Next week.