The great data debate: Is your company using a data management platform? And if not, why not?
We take a look at data management platforms, asking, should you use one, which is the right one for you, and how can you tell if it makes a difference?
Formerly the domain of a brand’s chief information officer, IT budgets are are increasingly controlled by chief marketers, a change ushered in by the ‘big data’ era where data management platforms (DMPs) are seen as key to operating a marketing department fit for purpose in contemporary practice.
A recent study from ExchangeWire Research, an outfit that examines the effect of the changing role of both martech and programmatic media buying technologies, found that DMP investment reached a tipping point in 2015 among both brands and marketers.
Generic awareness of DMPs is high because they represent a unifying technology across the media industry – publishers adopt them to support premium ad partnerships and media buyers use insight from DMPs to enhance their understanding of audience buying and improve targeting across digital campaigns.
The study, which surveyed 176 digital marketing professionals from around the world and included in-depth interviews with 14 senior marketing and marketing professionals, found that nearly half (48 per cent) of all media sellers currently use a DMP, and that less than 10 per cent have no plans to implement one in the coming months.
However, despite strong takeup and success rates, challenges still exist right across the industry, according to the report’s author Rebecca Muir, head of research and analysis at ExchangeWire.
The key barriers to improving uptake involve the removal of “legacy systems”, such as old IT infrastructure that may have been bought and implemented years earlier and are thus unable to communicate with external systems necessary to process such large volumes of data (ie customer insights).
“Replacing legacy systems is a challenge, and you find that brands don’t replace their technology that often,” comments Muir, adding that brands are less inclined to overhaul their IT infrastructure.
Although she does note that a quarter (24 per cent) of brand marketers surveyed had implemented a DMP specifically to improve ROI of marketing and advertising investment, Muir also observes that media agencies are arguably more likely to be adept at overhauling their technology infrastructure given the very nature of their business models.
“Agencies are more used to unplugging certain technologies and replacing with another, as well as working with multiple technologies for different clients, whereas brands’ exposure to such a way of working is much less,” she adds.
This too was reflected in reports from media agencies, with just under 50 per cent acknowledging a lack of understanding over the capabilities of martech among their executive leadership.
Almost one third (33 per cent) of publishers with a DMP reported that they chose to use a DMP in order to integrate first party data to offer better targeting options to their advertiser clients.
Compare this to media sellers participating in the survey, 75 per cent of which claimed that their executive leadership lacked a sophisticated understanding of such technologies.
“Therefore media sellers are less likely to be awarded the budget and time to implement something like a DMP,” adds Muir.
As observed, implementing, or ‘onboarding’, a DMP is not the simplest of tasks – both media buyers and sellers that had implemented such a technology claimed they had experienced challenges during the process.
Paul Silver, chief operating officer of Media IQ, a data and analytics company that helps all tiers of the media sector gain insights through the use of such technologies, advises those considering the onboarding process to examine the migration process, and to examine whether or not they have the correct existing infrastructure in place. “There is a bit of a misconception about how easy it is,” he says.
Kevin Akeroyd, general manager and senior vice-president for Oracle Marketing Cloud (OMC), one of the major vendors in the space, observes another reason making the onboarding process difficult, or even holding back initial investment, which is a lack of skillsets within an organisation.
“Other reasons include the lack of organisational readiness,” he says, adding that, sometimes, lack of communication between an organisation’s IT department and the media department can hold back progress.
“Sometimes it just takes the guy in an IT department to flick a switch and the guy in the media department can start buying using those insights, but that doesn’t always happen.”
Such progress can often be held up due to concerns, especially in verticals where brands hold sensitive information on their customers, such as the pharmaceutical or insurance industries.
Meanwhile, Tom Chavez, chief executive of Krux, another one of the major vendors in the space, also acknowledges that all sectors can experience challenges with onboarding and “ingesting data” to come up with comprehensive insights. Although, he advises anyone looking at the DMP space to look towards a six-week turnaround time before they are “up and running”.
ExchangeWire’s report also found that, for media sellers, the biggest barrier was disparate data sets, with almost half (48 per cent) citing the issue as a major challenge.
In such an instance, Stephane Pere, chief data officer at the Economist, a client of OMC, advises pairing with a suitable DMP vendor (as opposed to attempting to build one from scratch).
“We first decided to start using a DMP in 2013, and found that building it internally wasn’t as easy as you’d think, therefore we aborted it. It was labour-intensive, and just simply not a good user case,” he adds.
Instead, Pere advises those going about a similar process to look for DMP vendors that provide rapid deployment, and good account management. “Such an outfit will work hard to reduce discrepancies, with data sets, etc, and work hard to create tools that can then go and connect with alternate platforms,” he advises.
Additionally, Alex Azzorpardi, a senior digital manager at Adobe, another major vendor in the space, also advises prospective DMP users to ask themselves what use cases they can foresee through such an investment, and then devise a suitable measurement framework to assess their efforts. For instance, how can the use of a DMP improve the efficiency of media budget investment?
ExchangeWire’s report found multiple testimonies claiming that such a process is effective, with 90 per cent of participants that had implemented a DMP reported it as a success, 91 per cent also claiming that they had experienced a positive ROI within a year of implementation.
Muir explains how this can take effect, claiming that DMPs allow buyers to cut down on media spend that would have been wasted under the methods used prior to implementation. “Rather than relying on publisher data on who their audience is, DMPs allow you to cherry-pick your best performing customers or prospect types, thus making the ROI easier to come by,” she adds.
However, the success stories are not just emanating from the buy-side. The Economist’s Pere explains how it has been able to use its adopted DMP solution for “audience extension” (ie selling ad space its audience is consuming on different media properties), an activity that has helped the publisher improve yield since implementation.
This feature was first published in The Drum's 27 January issue.