What Is a Data Management Platform and Why You Need It in 2024

Have you ever noticed when some ad is chasing you after visiting a particular site? Just show interest in certain goods and use the Internet to learn more about it, for example, on the manufacturer’s website. And here you go—advertising with this product entices you to go to the online store and buy it.

How does this happen?

The era of Digital Marketing

We live in days of active technology development. That’s a fact that everyone is aware of.

Since the 1990s brands and companies have changed the way they do their business and now they widely use technologies for marketing and selling of their products and services. So to learn and use different strategies and trends on how to promote their business with technologies, a Digital marketing term was invented.

According to Wikipedia, Digital marketing is the marketing of products or services using digital technologies, mainly on the Internet, but also including mobile phones, display advertising, and any other digital medium.

Digital platforms are increasingly incorporated into marketing plans and everyday life. More and more people use digital devices instead of visiting physical shops. In result, digital advertising campaigns become more prevalent and efficient.

The question then arises as to how we should process data about users and actions they do, in order to convert them into profits using advertising campaigns?

What is a DMP

Here DMP comes to the rescue. DMP (Data Management Platform) is one of the key stacks of a software platform (often, but not always, an advertising platform) that collects, organizes, stores and analyzes data from any source. Therefore, it acts as a tool for determining the target audience.

Simply put, DMP is a large database that stores processed data about your customers, as well as a set of services that work with this database.

The processed data don't just come out of thin air. They are obtained by analyzing raw data and storing it in a database. For example, those might be structured events and users. Data will be stored in different, but related database tables.

Raw data comes in constantly. It can be information about the website visits and user’s actions, for example, subscribing for a mailing list and downloading the promotional material, filling out the registration form or buying a product.

Data is not limited to web pages only. Just as easily, we can receive information from mobile devices, like smartphones or smartwatches, each time a user interacts with any applications.

That data might also come from CRM systems or social networks. Even from your TV set—which videos were viewed, in full or in part, your likes and comments. This raw data differ from the prepared ones. We can get any input data and in any quantity. There is no web DMP or mobile DMP. Modern DMP should be cross-platform and be able to ingest all the data.

Key Features of a Data Management Platform

Now that you know what a data management platform is, let's examine its core features. These will be helpful in digital marketing and many other business areas:

Scalability

Thanks to this crucial feature, the platform handles increasing data volumes efficiently. It can expand its capacity as data grows, ensuring consistent performance and reliability.

Data integration and ingestion

DMP marketing platforms integrate data from multiple sources, including on-premises databases, cloud sources, and streaming data. Effective ingestion mechanisms ensure consistent and accurate data import into the system.

Real-time processing

With the ability to process data in real time, organizations make timely decisions based on the most current insights.

Security and compliance

Robust security features are essential to safeguard sensitive data and ensure compliance with various protection regulations, such as GDPR and HIPAA. These features usually include encryption, access controls, and audit trails.

Data management and governance

Effective management capabilities ensure high-quality, consistent, and reliable data processing. It includes features for data cleansing, deduplication, and lineage tracking.

Advanced analytics and machine learning

Data platforms often include tools for advanced analytics, machine learning, and AI to extract more profound insights. These capabilities enable predictive modeling, trend analysis, and other complex data analyses.

Data visualization and reporting

User-friendly visualization tools, such as dashboards, interactive reports, and charts, are necessary to interpret complex data sets better and deliver the required insights.

Flexible storage options

The opportunity to use various storage solutions simultaneously (for instance, warehouses for structured data and data lakes for unstructured data) ensures the practical storage and management of multiple data types.

Automated workflows

Automation facilitates data workflows, reduces the need for manual intervention, and increases data management efficiency.

User accessibility and collaboration

Interfaces accessible to users are essential for democratizing data access and usage within your company. 

Cloud-native and hybrid capabilities

Cloud-native platforms provide multiple cloud computing advantages, including elasticity and cost efficiency. Hybrid ones also enable seamless connectivity between cloud and on-premises environments.

Customization and extensibility

Businesses use customization and platform extension via extra tools, plugins, or APIs to tailor the data management platform to their specific needs.

Key Benefits of Using a Data Management Platform

A data management platform streamlines data access across your organization, which is helpful in many business aspects (such as in digital marketing, cybersecurity, and more). Moreover, with data management, companies avoid data silos when various groups within a company have different versions of a given piece of information.

Thus, you can also scale your organization as data volumes and velocity grow. Data management facilitates auditing and implementing new technologies, such as artificial intelligence tools. As a result, you can analyze large data volumes and receive unique, predictive insights.

Here are the main benefits of implementing a data management platform:

Lower data redundancy

You can often find duplicate data across various data-storing systems. Storing it in multiple locations may become inconsistent, formatted differently, and irrelevant. 

In contrast, a data management system provides a unified, valid source of information needed for further analysis. Also, you retrieve data from various systems, minimize inconsistencies, and cleanse the data to avoid errors. Then, it’s possible to store this information in a data warehouse or data lake.

Improved data sharing

Sharing data with business partners and even among internal business units is often problematic. In particular, sharing the entire data volume within a single database is challenging since it’s limited to a report subset.

Now, it's necessary to provide the entire data set to support data science and AI-based analysis techniques. The direction toward scalable cloud storage supports secure and hassle-free data sharing with other organizations, business partners, or colleagues. Moreover, you know precisely which information lies in each data set and whether you can share it.

Stronger data privacy and security

Data security and privacy are vital data management functions. As data security regulations grow (e.g., GDPR and HIPAA), you risk failing to secure your data. 

Data security strongly depends on governance and data catalogs. They inform you where sensitive data is kept, whether it needs encryption, and who can access it. In case of a data breach, the metadata in catalogs defines the scope of the compromised information, significantly lowering (or even preventing) potential fines.

Improved backups and data recovery

Data backups are an excellent way for an organization to protect sensitive data from hackers and ransomware attacks. With DMP marketing platform management, you can develop a backup or recovery strategy that meets your business's data model and preferences. Thanks to cataloging your data assets, you define your company's most critical data sets.

DMP vs Data Warehouse

But it’s not just storage. When we talk about Data Warehouse, the information gets there without any preliminary processing. In DMP it undergoes an additional transformation. Based on the incoming data the necessary models are built, data analysis and segmentation is done, etc.

Understanding How a Data Management Platform Works

A data management platform completes a series of steps to gather, arrange, and activate data. Here's how DMP marketing platforms work:

1. Data Collection

DMPs gather data from first-, second-, and third-party sources. Companies arrange the compiled information into a unified format to access insights into users and target audiences (which is particularly crucial in digital marketing). It’s also possible to integrate DMPs with other platforms like ad servers, DSPs, or social media to gather data from online and offline channels.

2. Data Segmentation

DMPs segment the gathered data into various categories, including demographics, intents, interests, behaviors, etc. They also use various data segmentation methods, such as machine learning and predictive modeling. The company decides which segmentation categories to adopt based on its specific goals.

3. Data Analysis

A data management platform analyzes the data to generate marketing insights and recommendations. DMPs may run cross-channel attribution, audience profiling, lookalike modeling, or campaign optimization. 

4. Data Transfer

After data collection, segmentation, and analysis, the DMP transmits it to users for implementation via ad exchanges, demand-side, and supply-side platforms. Then, it facilitates the ongoing detection and arrangement of valuable information, thus ensuring "smarter" targeting and personalization.

How DMP collects such data

In fact, everything is simple. For websites, when a javascript tracker is triggered, it collects the necessary information and sends it to the server (collector).

For mobile applications, TV sets, watches, etc. these are special software development kits (SDKs) that are used during application development. As a result, they perform the same actions, send the necessary information to the server.

For the 3rd-party CRMs—it can be API (Application programming interface) which interacts with the system, receives the necessary data and transfers it further to the collector.

Note: Below, we will be explaining business logic on the example of a tracker for websites, but it should be understood that similar algorithms occur in the case of mobile devices, CRM, etc.

Once DMP got the data

So, once DMP got the data it should decide what to do with it.

The first step is to organize the data. There is a lot of data and we need to bring them into a structured form to simplify the work with them in the future, and also to save space in the database.

Further, this data is enriched. For example, having an IP we can get the user geolocation—country, region, city, zip code. With a user agent (browser data), we can get information about the device that the user is using: it's brand and model, all knowledge about the operating system, the size of the screen, etc.

Creating a User Profile

ОК. We have a lot of events, but where do users come from? Again everything is simple. The first time you visit a website, you are assigned a unique ID, which is saved in the browser using cookies. In the future, the same cookie is used for other visits. If you later log into the CRM system, the DMP, having that unique ID, can already get more accurate data about you. But even without logging, often DMP has already enough information to build your profile and figure out who you are: а man or а woman, how old you are, what you are interested in and what you intend to buy at this time.

Where that info comes from? Maybe Machine learning?—Of course!

So, the DMP receives an event stream. Each event has its unique ID which is used to create the original user profile. So far there is not much information there. Although if we’re talking about the page view events, the body of the event has the address of this page.

Such events are sent to another stack, a classification. The page's content is parsed. Different machine learning algorithms are used which based on the content of the page, make an assumption about you. And the more pages you visit, the more accurate information is gathered about you.

How to place a tracker on the website

Well. You may have another question now. It’s clear now that to get a user profile we need to set up a tracker somewhere. But what if you own a few websites? What are the odds of someone visiting them so that we can create this user’s profile?

In such cases advertising platforms do help. An advertising campaign is created and along with the banner display, the tracker is triggered. You surf the Internet, advertising materials are shown to you and, guess what—at the very same time data about you are sent to the collector server.

How does it help us in business?

So, a DMP is big data. And we want to get some benefits from it.

Analytics

The first thing you can get from this data is analytics. Various reports, such as visit statistics, the daily number of sessions, gender and age statistics, and much more can be obtained through processed data.

Segments

The second one, but no less important, it is possible to build segments on this data basis. For example, you can choose women 25-35 years old from the US out of all profiles who are interested in cars. Why do we need this? To help other systems to study an audience.

For example, it could be a DSP (A demand-side platform), which using DMP data, helps advertisers find their target audience. So, in the future, you will be able to start a new advertising campaign, but banner advertising will be shown not to all visitors, but only for those who are interested in it.

Top 8 Data Management Platforms: Best Solutions for Effective Data Handling

According to G2 Crowd, there are lots of big DMPs and the 10 most popular leaders are:

• V12 Data
• Lotame
• Adobe Audience Manager
• MediaMath TerminalOne Marketing OS™
• Oracle BlueKai
• Salesforce DMP
• SAS/ACCESS® 9.4 Interface to PC Files
• Nielsen DMP

Of course, each of them has its own pros and cons and it’s up to you whom to choose. Let's look deeper at each.

V12 Data

With V12 Marketing data services, you acquire mass lists of user data. Their DMP marketing system facilitates list purchase ordering, targeting, and management. This data management platform will enhance your marketing campaigns. The solutions available with V12 include direct outreach and multiple advertising options. Some examples of data you can gather, track, and analyze are emails, physical addresses, cookie data, etc.

Lotame 

Lotame provides an end-to-end data collaboration platform, Spherical. It enables digital marketers to combine, analyze, and trigger data necessary for innovation and business growth. Thus, experts in digital marketing accumulate data internally to enable actionable customer intelligence, engage data-informed audiences, and ensure identity-powered activation. 

Adobe Audience Manager

An Adobe-powered data management platform ensures the following benefits for its customers:

• Data strategy transformation. Gain access to first- and third-party identifiers to create a data management program without third-party cookies.
• Rich customer profiles. Use streaming data with Adobe Audience Manager to set up real-time accounts and automatically update them.
• Prompt activation. The tool comes with real-time B2B and B2C instant profile activation across channels like social media, CRMs, or your proprietary platforms.
• Built-in management. Grant your coworkers access to the required data via customizable security options.
• AI and machine learning. Use AI and machine learning for more precise user behavior insights, developing similar audiences, and raising tendency scores.

MediaMath TerminalOne Marketing OS™

MediaMath is the demand-side platform that provides robust off-the-shelf and custom capabilities, letting brands reach and influence customers. The platform offers the following solutions:

• Campaign management. Control all digital advertising aspects via features like in-line and bulk editing, Dynamic Budget Allocation, and troubleshooting.
• Media management. Effectively activate, troubleshoot, and report on the deals websites offer for digital ad campaigns.
• Identity management. Transact right on the top ID systems like IDL, ID5, Merkle, Parrable, and LiveIntent.
• MediaMath Audiences. Reach the highest-value customers and achieve optimal results for your targeting goals.
• Brand safety. Boost customer privacy and set up fraud controls.
• Brain machine learning algorithms. Optimize bidding decisions and meet your business needs.
• Reporting and measurement. Test, target and measure at scale.
• APIs. Build custom solutions to develop your core tech base.

Oracle BlueKai

With this platform, organizations can integrate massive, pre-arranged data volumes. Companies can also engage ready-to-buy customers and significantly increase conversion rates. Thanks to the insights available within this platform, you can rapidly improve your business's marketing methods and advertising efforts. Finally, BlueKai ensures optimal resource utilization while processing campaigns. It assists companies with a complete user acquisition journey.

Salesforce DMP

The Salesforce DMP media helps companies, experts in digital marketing, and agencies use data to build breakthrough brand experiences. Also, it’s possible to deepen consumer engagement and drive business results. 

Here's what else this data management platform ensures:

• Create a comprehensive customer data profile to power up 1-to-1 marketing. Thus, you retrieve distinctive insights on every customer to ensure an enhanced experience through advertising, commerce, and content.
• Optimize cross-device user engagement strategies. With Salesforce DMP, you connect with your customers in their preferred way to interact with your business.
• Ensure higher performance with real-time intelligence. Powered by Einstein, this platform responds to new data sources and signals. Thus, marketers optimize their strategies for building customer relations.

SAS/ACCESS® 9.4 Interface to PC Files

This tool lets you import and export supported PC file formats between the source format and SAS data sets (or CAS files). Files move between the original PC format and SAS using IMPORT and EXPORT procedures, wizards, or through LIBNAME statements. This platform facilitates data transmission and management. 

Nielsen Marketing Cloud

Nielsen Marketing Cloud gives you real-time insight into your target audiences. Thanks to the built-in analytics and Nielsen-powered AI algorithms, you consistently evaluate your ad campaign success and make adjustments on the go. With this fully integrated platform, you track every campaign phase, including activation, data management, and attribution. 

Nielsen Marketing Cloud also offers the following opportunities: 

• Expand, segment, and optimize audience data through multiple marketing channels;
• Integrate third-party tools to enrich the data;
• Segment the audiences according to the most significant characteristics;
• Implement adaptive learning to track audience behavior and make adjustments to improve your marketing strategies.

Are there any open source DMPs

We don’t think there are open source DMPs. However, there is a certain great analytics software. Some of them are:

• Matomo (formerly Piwik)
• Snowplow

Also check out in our next article how to build a simple DMP, its architecture, which programming languages and technologies are relevant in this domain.

Conclusion

Digital marketing is an actively developing industry that requires a multi-channel approach for communication and interaction with customers. Therefore, to communicate with your audience most effectively, you must uncover the full potential of the data that you have already possessed or are able to possess. Data Management Platform, in turn, makes this possible.