Don't Kill Your DMP, But Get To Know It

When George P. Slefo’s article hit AdAge on Valentine’s Day, I wanted to fire off about 1,000 words immediately. Thankfully, I took the weekend to let the article percolate a bit before commenting.

George touched on key developments for marketing technology platforms thanks to privacy and tracking changes involving third-party audience targeting & measurement. In other words – right up our alley. He brought some provocative questions to bear in the piece. In particular, the article asks: are DMPs dead?

Before we dive into the article’s many perspectives, answers, and comments regarding that question, I thought the article offered a few really coherent, simple educational tidbits anyone in marketing & media could benefit from hearing. This is especially true if you manage or oversee digital marketing technology at your company.

First of all, George helps us all out by landing a pretty useful answer to the question “What is a DMP [Data Management Platform], and how is it different than a CDP [Customer Data Platform]?” from Matt Kilmartin:

“Today those companies and others are rolling out customer data platforms, or CDPs, which use first-party data to help marketers foster direct relationships with customers. ”

— Matt Kilmartin, CEO of Habu

You would think that with so many dollars being thrown at mar-tech software, this information would already be common knowledge to anyone working in customer acquisition or marketing. Is anyone walking out of a Ford dealership still wondering “What is a car?”

The reality is that few people are entirely certain (and fewer technology companies want to define) what a Data Management Platform actually is. As for CDPs, there’s even less information. Heck, even the CDP Institute struggles to offer anything concrete. How does such an information chasm come to be?

Blame goes beyond fuzzy language from trade organizations. Chief among the many reasons are the marketing & messaging for almost every mar-tech SAAS on the market: almost every platform claims it does everything. This insidious trend feeds on itself for two reasons:

  • In an increasingly complicated tech ecosystem, the “everything solution” always sounds appealing.

  • Customers grow increasingly skeptical of software that doesn’t claim to do everything: won’t this add to an already fragmented stack?

The truth of the matter is that these trends drive less understanding. If everything is a Data Management Platform, does that distinction mean anything? If a mar-tech software partner, who once identified itself as a Data Management Platform, now call itself a CDP, many marketers and data science professionals will understandably fail to grasp the difference between the two at all.

Thanks to George’s article, Matt Kilmartin helps us with a clean, concrete way to differentiate these two software categories and functions:

Data Management Platforms help businesses leverage audiences – generally through 3rd party datasets – to deliver against marketing objectives.

Customer Data Platforms specifically connect that functionality to first-party datasets, including business’ existing customer database.

So if nothing else, this article offers some clarity and context critical to anyone evaluating a marketing technology stack, or charged with deploying an optimized approach. But where do I stand on the questions posed in the article: are DMPs dead?

““When [Google’s Chrome] announcement came out, some said the DMP was dead,” says Solomon. “It was an oversimplification and just factually incorrect.”

Lotame has deals with publishers that help it capture first-party cookies, says Solomon, which won’t be affected by Chrome’s 2022 change. ”

— Adam Solomon, CMO of Lotame

So long as businesses need to acquire customers, and prospective customers spend time on the internet, there will certainly be a role for Data Management Platforms, or whatever they call the next class of marketing technology that accomplishes the same task. But just because their demise is exaggerated, it does not mean that these technologies and services have solved all the issues that face them & their customers. Far from the case, the “we’ve solved it already” mentality is a big red flag for DMPs and other companies in the business of collecting and exchanging information. Collecting user-level data without explicit consent, transparent documentation, privacy, portability, and preserving consumer rights over their information is not going to fly for very much longer. And the issue goes far beyond just the discrete technological methods used for this data collection today. Just because your 3rd party partners don’t collect their audience data using a 3rd-party cookie doesn’t mean their methodology is future-proof. The ‘whack-a-mole’ going on in the market will continue to escalate: companies that have their data collection methodology blocked by Apple, Chrome or Firefox today can choose another approach, but that does nothing to stop these companies from escalating their ad-blocking efforts in the future. This back and forth is already well underway. Companies should avoid playing fast and loose with the spirit of the rules being debated around collecting data on users, and how users control their own information. A greater emphasis on privacy, security and control will be good for consumers and good for business.

Where does your organization stand on this question? If you aren’t sure and want to discuss what this might mean for you, contact us at Bonsai.

About the Author

Matt Butler
Ex-Googler of 12 years, Matt was a founding member of Google’s analytical consulting team, developing analytics, statistical forecasting, auction modeling, and machine learning for companies such as Procter & Gamble, Coca-Cola, Unilever, Kohl’s, Best Buy, and many more. He went on to lead global technical partnerships before leaving to found Bonsai in February, 2020.