A DMP (Data Management Platform) is used by marketers for building profiles of anonymous individuals for the purpose of storing and sharing the information with advertisers. It also helps identify individuals who have interacted with a brand. The DMP creates a unique identifier for the individual, and then links the identifier to all of the data that has been collected about that person. Most of the information used to create these profiles is collected from 3rd party data from cookies rather than first-party data.
It is important for marketers to use a DMP because it allows them to use audience segmentation to specifically target their audience. The profiles allow for segmentation to be done through identifying groups of people who share similar characteristics, such as age, gender, location, income, or likes/dislikes. It also helps marketers identify potential new customers and assess the effectiveness of their marketing campaigns.
DMPs also help to improve the effectiveness of digital advertising. Advertisers can use the information in a DMP to target ads more accurately to individuals who are likely to be interested in them. This improves the chances of website purchases and in turn an increase in revenue.
As more and more companies begin to use DMPs, it is becoming increasingly important for individuals to be aware of their information and privacy. As an individual, if you are not comfortable with the amount of information that is being collected about you, you can opt-out of certain 3rd party cookies. However, this can limit the usefulness of some websites. While a DMP may be an invasion of privacy for some individuals, it is important to understand that it is also a powerful tool for marketers. For the majority of people, the benefits of using a DMP outweigh the negatives.
How does a DMP work?
A DMP works by collecting data from various sources such as web analytics, CRM systems, social media platforms, and more. This data is then organized into profiles that can be used to target specific audiences with tailored messages.
What are the benefits of using a DMP?
Using a DMP provides marketers with an efficient way to manage their customer data in one place. It also enables them to create more targeted campaigns based on user behavior and preferences, resulting in higher engagement rates and improved ROI.
Fun Fact:
"According to a survey by the Data & Marketing Association, more than 80% of marketers who use DMPs report that they are effective in helping them meet their marketing goals" (DMA, 2018).