Data Management 101: How Does A DMP Work?

The data management platform, also known as a DMP, is continuing to gain popularity in the digital advertising software world. Although many companies understand the power of implementing a DMP, not all recognize its full breadth of features. Let’s start by tackling the simplest question: What does a DMP do?

What Does A DMP Do?

DMPs essentially act as a bridge between collected data sets and advertising channels. A DMP uses stored information (possibly from a CRM software system) to help businesses place ads in the most efficient and effective ways possible. Breaking it down, here are the four main functions of a DMP:  

  • DMPs take in data from users by monitoring their online behaviors and habits, which is then compiled into reports.
  • After user data is collected, it is grouped into different customer segments that help determine your target audience.
  • Using this information, a DMP sends instructions to place ads or change the content of a web page or email based on the customer segment you are attempting to serve. This is usually done via a demand-side platform (DSP) software.
  • On to the testing portion––after the ads are placed, it measures the impact of those ads and improves the instructions it sends based on the results.

Now that we’ve covered the foundations of the mighty DMP, it’s important for business owners to know who they need to run it. In order to make the most out of a DMP, you’ll need the following: an outreach specialist capable of capturing unique information, a talented media person to arrange customer segments, a skillful digital marketer capable of customizing content and a detail-oriented data analyst to break down test results.

After you’ve hired a DMP dream team, the next big question is: How does a DMP actually collect data?

How Does A DMP Collect Data?

Without any manipulation a DMP is just a yawning chasm of empty memory waiting for you to input information. Data vendors that are willing to pawn off anonymous cookies and device IDs in response to your advertising are always willing to fill it––until you introduce yourself. Feeding your DMP with quality information helps take your ad game to the next level. With your help, a DMP collects data in three ways:

  • Tags are placed on digital properties, such as websites, to collect additional user data.
  • There is an onboarding process––a DMP takes data you send it and stores it for future use.
  • It works with APIs that assist with server-to-server exchange.

Regardless of how you work with a DMP, sharing your own data is key to making the most out of your system. A DMP can learn just about anything about your ideal customers, but first, you need to teach it what to learn. Inserting and segmenting information properly into a DMP can help you target the customers you want, when you want. If you aren’t currently using a DMP, it’s time to start.

DMP Products

To learn more about DMP products or read real user reviews, visit the G2 Crowd DMP category page.