Digital Transformation

Over 90% of brands will use DMPs by 2018

By Ronan Shields | Digital Editor

April 12, 2016 | 6 min read

A little over five years since arriving on the market data management platforms (DMP) are now a staple of contemporary marketing practice, with over 68 per cent of European brands, agencies and publishers using such technology, according to a study.

Figures published today (13 April) show over two-thirds of media professionals now use DMPs, with this number set to rise to 92 per cent by 2018, according to a study by ExchangeWire, and Weborama.

DMPs opening new revenue streams

The figures also show 75 per cent of trading desks are using DMPs to attract new revenue streams as the industry holding groups aim to make up for the (now slim) profit margins they make on trading ‘early digital media channels’ - search and direct display – according to report author Rebecca Muir, ExchangeWire’s head of research and analysis.

Almost half (45%) of respondents said a ‘lack of knowledge’ was a barrier to adoption of programmatic

In the current climate, profit margins in trading such media are typically less than 1 per cent, compared to 10 per cent eight years ago, according to Muir, who added that agencies need to find alternative ways to maintain revenue.

“This can be achieved through more efficient trading desks and proprietary technology. Recently there have been some high-profile moves within agencies that point towards this strategy,” she added.

Publishers using DMPs to mitigate risk

With 76 per cent of publishers participating in the study claiming they are using DMPs to attract new revenues, Muir highlighted that many had expressed concerns over ‘data leakage’, i.e. where they lose competitive insights on their audience to third parties.

The latest marketing news and insights straight to your inbox.

Get the best of The Drum by choosing from a series of great email briefings, whether that’s daily news, weekly recaps or deep dives into media or creativity.

Sign up

Many publishers are turning to DMPs to mitigate this risk, but they are not a ‘catch-all’ solution for data security and publishers need to ensure that they have a full-suite of protection mechanisms and are only partnering with trusted entities, according to Muir.

Challenges of DMP implementation

However, this does not mean the emergence of DMPs is not without challenges the study goes on to reveal. Almost half (48 per cent) of all respondents reported challenges over the implementation of data sets, with challenges around consolidating disparate data sets.

In addition, 46 per cent of respondents cited a lack of internal skill sets as examples of said challenges. Meanwhile, 45 per cent said a ‘lack of knowledge’ was a barrier to adoption.

Muir explained to The Drum that the qualitative aspect of the study demonstrated that early adopters of DMPs implemented them by nominating “an internal champion” to make full use of its capabilities.

“Unfortunately, finding someone who has the required skills and attributes to do this role is hard. They need to have both technical knowledge and commercial acumen,” she said.

“They need to be skilled project managers, capable of coordinating multiple teams and objectives. Over time, we should see more of these people emerge as data-driven approaches become more commonplace throughout businesses.”

The report is based on a survey of 360 digital marketing professionals from around the world across ExchangeWire and Weborama’s databases, with ExchangeWire enhancing these insights by conducting eight in depth interviews with senior level marketers over their use of DMPs.

DMPs are not a one-size-fits-all solution

Mathieu Roche, Weborama’s global business development director, said: “DMPs are not a one-size-fits-all type of solution and need to be chosen and implemented in a customised manner by each organisation. DMPs offer a way to break down the walled gardens imposed by some large online advertising platforms, and enhance data-driven efforts. Yet it is vital for brands, publishers and agencies to ensure they have the right knowledge, and systems, in place for their DMP to realise its full potential.”

The study also found the needs of early adopters of DMPs are growing increasingly sophisticated, as they no longer view them as simple activation tools, and are looking to utilise such technology to enhance their engagement strategies, for instance by improving their media buying strategies.

Growing sophistication

DMP vendors are facilitating this growing sophistication by helping clients’ audience segments that are at risk of churning, or new customers who are most likely to be high spenders, and then acting appropriately.

“We're seeing DMPs start to identify the signals and behaviour patterns of more and more segments like this and provide more ways for marketers to react,” said Muir.

“One of the thought leaders we spoke to explained how their DMP identifies customers who are likely to leave and sends the CRM details to their call centre. Operators then call the customers armed with their entire customer history as well as the knowledge that they are at risk. They can then tailor their conversation to that situation.”

Also participating in the study was Julian Brewer, head of TSB digital commerce, who commented: “We’ve used a DMP for a number of years and ‘learning through doing’ has certainly changed our view of how we use it and what we want and don’t want from a DMP platform. We’re currently exploring our requirements from a second generation DMP and looking back at our initial demands... they are markedly different.”

A full copy of ExchangeWire and Weborama's report can be downloaded here

Digital Transformation

More from Digital Transformation

View all

Trending

Industry insights

View all
Add your own content +