07 Sep What is DMP and why do marketing agencies need it?
Data Management Platform is a centralized base for combining cross-channel first and third-party audience data. Let’s try to understand who is meant by the first and third parties.
First-party data is generated information about users taken from websites, social platforms and various apps of the brand itself.
What is included in first-party data:
- Personal information about the user – name, surname, email, address, phone number;
- Information on demographic characteristics – gender, age, nationality;
- Limited information regarding interactions with the brand – purchase history, interests.
Usually, first-party data is freely available to the brand owner, as it is stored in the CRM databases or web analytics systems of the brand itself. Third-party data is information generated based on the Internet activity of the target user.
The two components of third-party data are:
- Individual demographic characteristics – income level, marital status;
- Household features – the number of children in the family, etc.
Access to this kind of information allows a brand to significantly increase the level of accuracy of targeted advertising. This is because the segment of users is selected according to qualitative, not quantitative characteristics. All that remains for the brand is to clearly define the specific characteristics of its target user and allow the platform to find it based on the information collected.
Let’s consider an example
Let’s say that a home interior design and refurbishment client walks in and asks you to find high-quality leads, in other words, a goldfish.
Naturally, you start an advertising campaign targeting young homeowners within the company’s reach. However, such a campaign may have a low conversion rate simply because few people need a new design when they first move into a newly finished apartment. Instead of goldfish, you provide a small catch of red puffins. Delicious, but such a fish will not fulfil the desire to increase the profitability of the brand.
And now let’s imagine how the situation will change if you can already identify the sea among the ocean of the target audience, but interested consumers, for example, in cooking? Narrowing down to the size of the lake of users will help information about those who are now looking for new solutions for arranging the kitchen.
All this data can be collected from the search stories for new kitchen design solutions in the browser and downloaded cooking applications. Well, it will be much easier to catch a goldfish in a small pond, where they swim with the appropriate family income.
And surprisingly, the goldfish is identified and ready to grant wishes. Do not forget that you can communicate with it through her favourite sites (the history of the frequency of visiting sites, the history of purchases).
As a result, instead of targeting a wide segment of homeowners, DMP helps to create an advertising message for exactly the target audience that is already obviously interested in the product. After analyzing the user’s average income, you can advertise a kitchen redesign project that he can afford on the sites he visits most often.
We hope that now the words DMP and big data are no longer just stuffing of mainstream terminology for you, but a conscious choice in determining the goals of marketing strategies. Informed means armed, right?
