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What is a Data Management Platform and Why Do YOU Need One

Yael Kochman
What is a Data Management Platform and Why Do YOU Need One

Mapp recently had the pleasure to speak at All Things Data, which is a conference about… well, data. At the event, we talked about what is a Data Management Platform, and how it can help marketers connect the dots using customer data to truly understand the customer journey.

When we got off the stage, there was a queue of people lined up waiting to speak to us about data management.

Some said that they’re already considering implementing a Data Management Platform but needed to learn more about it – How does it work? How does it make data management easier? How can it be integrated with their existing marketing stack?

Others had never even heard about it and were so curious to learn what a Data Management Platform actually is and how it can help them be better at what they do in their digital marketing.

So we decided to write the answer to some of these data management questions in this article – along with how it differs from a Customer Data Platform (CDP). With changes in the market and tighter GDPR regulations, we’ve got the biggest MarTech tips you need to take your enterprise marketing to the next level for the long term.

Let’s start from the DMP basics…

What is a Data Management Platform?

First comes first, what is a Data Management Platform (DMP)?

A Data Management Platform is a software that enables marketers and/or advertisers to use data, from various data points, to manage the customer journey more efficiently and optimize automatically the results of their marketing and advertising campaigns. Designed originally as an AdTech tool, the advertiser can identify new audience segments and reach those target segments via various paid media channels, as an example, using product recommendations. It’s also a great tool to use together with demand-side platforms (DSP).

A DMP lets you collect, manage, and analyze anonymized data about your customers from every touch point – including behavioral, geographic, CRM, and profile data, from every touch point in one platform. The result is an integrated picture of all your data sources, from your first-party data, second-party data, and third-party data. This step is crucial as it lets you activate that data as actionable analytics and use it to target your respective audience with the utmost accuracy possible across multiple or several marketing channels.

The right DMP software allows your results to perform in real-time. For advertisers, it allows you to manage and optimize media buy and advertising creative on the fly. This possibility of receiving a 360-degree view of your customer and how your campaign is performing, is truly vital to actually reaching a specific audience in real time.

What is a Customer Data Platform (CDP)? 

A Customer Data Platform (CDP) works in a similar way, but focuses more on PII first-party data store over a long period of time to customize your marketing content for your existing customer base. We’ll get more into the differences between a DMP and CDP below.

How does a Data Management Platform work?

A DMP essentially collects all your data from any touch point you have with your customer. This can be a digital touch point – your website, mobile app, marketing campaigns, social media etc. as well as offline – store information, call center inquiries. It also primarily collects third party data and stores this for a short amount of time for even more effective data management. The DMP then creates audiences and marketers use this data to push the audiences into buying /execution points.

Next, the DMP optimizes your results using lookalike audiences. A lookalike audience is a term used to identify potential prospects that exhibit the same characteristics as your best performing customer groups. Having all your data in one place allows the DMP to analyze and track your best performing customers and create lookalike audiences that are very similar to it. This is a great way to get insight and tap into new prospects, while knowing in advance that there is a good chance of turning them into profitable customers.

Finally, the DMP collects response data and repeats the process using the new data gathered. This data management process is a constant loop that continues to grow and optimize in order to fine tune your campaigns in real time and find new audiences for you.

To summarize, a DMP:

  • Collects data from various sources, both online, offline, and primarily third party
  • Creates audiences
  • Pushes audiences through the buying process
  • Optimizes the results Collect response data

Data management becomes a circular process leading to infinite optimization and marketing efficiency. Using lookalike audiences, a DMP can help you discover new audiences that are likely to buy and automatically match your marketing messages with the right audiences. This makes your digital advertising even more effective too.

When it comes to meeting the challenge of the ‘on-demand’ consumer, using your analytics to know your audience is absolutely essential to enable brands to react and provide relevant personalized marketing in real-time. Let me unravel what a Data Management Platform can offer you and then you can decide whether a DMP should be at the top of your checklist for success this year – and why you should consider a CDP.

Why Do I Need a Data Management Platform?

In a survey by Infogroup 62% of marketers noted that they are already investing in data marketing solutions, with additional 26% planning to start investing within the next two years. Marketers are beginning to see its worth and become aware of the benefits of a data-driven marketing strategy in driving more engaging real-time customer interactions and as a result a much more valuable customer experience. But with all this big data to our disposals, marketers are still finding it difficult to connect the dots in their data strategy. In fact, seven in ten marketers have gaps in the capabilities and effectiveness of their technology when it comes to creating a customer view.

A Data Management Platform is a dream come true for data driven marketers. With all the technology we have at our disposal, the challenge is to bring all the data into one place for better data management; to be able to segment and analyze it in real-time for better decision-making and then act upon it in order to optimize and target your campaigns. One of the biggest challenges for marketers today is to build a single view of their customers. By collecting customer data from different sources (with compliance in mind), such as social media, email, media campaigns, and your website as well as offline data such as in-store, then adding the dots becomes almost impossible.

But, what if you could imitate a Kaleidoscope to create one single view of your customer across the entire buyer journey?

Well, you can. One solution is to implement a Data Management Platform that will allow you to break the silos and unify all your data in one place to drive your advertising. But to maximize your marketing results for the long-term with GDPR compliance in mind, an alternative and more sustainable solution is to also work with a Customer Data Platform (CDP).

What are the main functions of a DMP vs CDP?

Integrating a DMP into your marketing stack will enable you to become a smarter, more efficient and more data-driven marketer when managing your campaigns. But implementing a CDP can help you power data-driven marketing strategies for the long-term.

Amongst others, these are the key functions and differences in what a DMP and CDP offers for you to take into consideration:

Robust data collection: The ability to collect various offline and online sources, but collects granular, disaggregated data. Robust data collection, management enrichment and prediction from both offline & online data sources (campaign, behaviour, CRM, Contextual data) via API & SDK, tracking pixel or SFTP batch uploads. Unifies this data to create unified customer profiles that are built with real-time data collection.
Data classification & structure: The ability to structure your data based around user attributes for future segmentation, engagement, flexible event definition and value assignment. Custom Integration Hub to clean, classify, manage, and structure the data, matching unknown profile with ID, to build a unified 360° customer profile. Data managed is 100% GDPR compliant, and a CDP is first party data driven.
Integration with media buying platforms (networks, exchanges, DSP), and 2nd and 3rd party data providers. Integration with multiple systems, including content, customer data, eCommerce, optimization, loyal and ads platforms.
Centralized audience analytics & reporting: providing on a campaign and audience level. Pre-built dashboards surfacing campaign level data and providing fast access to actionable insights for better management of campaigns. Smart alerts & AI.

Is a DMP or CDP better for your MarTech Stack?

If you step back and take in the view of what a Data Management Platform has to offer, you begin to see a much larger picture than you could have truly imagined. In an era when minute-by minute campaign reporting is possible, no brand can afford not to examine its potential, with help of data management.


But the way we use data, ensure proper data quality, and improve data governance is constantly evolving. GDPR regulations, a cookie-less world looming, and consumer transparency are factors that have made zero-party and first-party data a priority (over third party data) in data-driven marketing. A CDP is a sustainable alternative for brands who want to build a first-party data strategy, align with market regulations (GDPR), and have an all-in-one solution (CDP functionalities + cross-channel engagement + DMP + Analytics) – rather than going for siloed tools like a separate DMP or separate CDP.

But having a software such as a CDP is now seen as a fundamental requirement in data-driven marketing for any enterprise. Digital marketers need to keep in mind the direction marketing is heading towards, especially as becoming insight-led can help you adapt quicker and help predict what’s to come in your customer’s behavior to better target your personalization. For marketers looking to power a first-party data strategy, it means having the right tools. Reviewing and managing your MarTch stack regularly is essential in identifying what platform can help you create insight-led customer experiences across all omnichannel touchpoints to better target your personalization, and improve the experience of your users.

Get to know what platform best suits your enterprise with our Evaluation Guide to Marketing Platforms.

[Updated in June 2022]

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