What is a data management platform?

What is a data management platform?


Data management platforms help to use data profitably. Read how this works and what you should consider when choosing a data management platform. […]

Detailed customer data is what should help the campaigns of companies and advertisers to succeed. A data management platform helps to process this data, logically link it and make it usable for marketing purposes.

A platform for data management is basically a central database, with the help of which user data is logically recorded, evaluated and stored in order to use it for the control, control and optimization of online campaigns. The stored information includes so-called first-party data that companies and advertisers collect and own independently, for example on their own website or in CRM databases.

It also stores data that advertisers have acquired from media agencies or other third-party providers. These so-called third-party data include, among other things, information on the general surfing behavior and search queries of users, as well as data from market research analyses.

By combining this information on a central platform, data silos are broken down and a uniform view of customers is made possible. Data management platforms ensure continuous reporting. By continuously collecting, evaluating and comparing customer data from different data sources, strategies can be planned in the long term and new target groups can be discovered and addressed.

The platform organizes and links all available information from various data sources to create a specific user ID for each user. Every time an ID is detected, whether on mobile devices, on the computer or after completing a payment at the POS, further data is included in the user’s profile. All this happens pseudonymised in accordance with the law.

Data management platforms are particularly important for programmatic advertising, since in this type of media purchase significantly more targeted and thus much more relevant messages can be played out via various channels. The real-time display of advertisements is carried out by offering advertising inventory via a Supply side platform (SSP), which is offered via the Demand Side Platform (DSP) of the advertiser or the commissioned agency. Before the bid, the Data Management platform collects information about the user to whom advertising is to be displayed. The relevant data is provided by the data management system within a few milliseconds, after which the DSP automatically decides whether to bid on the offered web inventory.

There are numerous data management platform providers-Salesforce, adform, and TheADEX-to name a few. The functionality may be similar for all providers, but there are sometimes significant differences in the scope of services of the different data management platforms. There is no perfect platform, each brings advantages and disadvantages. When choosing the right provider, you should not trust your own gut feeling, but talk to all departments involved in the company about concrete requirements for a platform for data management and possible use cases.

When creating such a catalog of requirements, it is worthwhile to consult the opinion of experts, because not every company that thinks about buying such a platform really needs it. If you want to choose a data management platform, the following criteria should be considered when selecting the right provider:

  • Processing: In order to avoid data silos and collect all relevant customer data, different data sources must be considered. It should be possible to integrate all relevant sources into a data management platform without having to procure or develop further connectors in a complex and cost-intensive manner. The transferred data must be cleaned up and unified. Here, too, it is important to find out what possibilities a data management platform offers and whether these can be automated in order to keep the effort as low as possible. The central function of data management platforms is customer segmentation. This raises the question of what data can be included in the segmentation to improve it and what possibilities the platform offers to make this process easier and smarter – for example, through custom templates.
  • Data analysis and integrability: Data management platforms not only collect and manage data, they also provide opportunities to analyze it, which can be the key to the success of a campaign. The implementation of these analyses as well as the evaluation of the results and their visual preparation should be designed as user-friendly as possible, so that companies without data scientists can easily use these features. The results of the analyses should – if possible automatically-lead to further marketing measures. Therefore, a data management platform should be well compatible with other marketing tools, both internal and those of marketing partners and advertising networks.
  • Privacy and Security: When dealing with personal data, data protection must of course be guaranteed in accordance with the European General Data Protection Regulation (GDPR). Corresponding functions must be available on a data management platform. It is not enough to assume that data management platforms only work with pseudonymised cookie data, IP addresses and device IDs are also an issue for data protection.

A data management platform should provide opportunities to obtain and manage users ‘ consent to the use of their data (consent management). These should be able to be used across all data sources. However, it should be specifically documented what the consent refers to. In addition, it should be possible for companies to anonymize or pseudonymize this data independently by means of a data management platform. Furthermore, the GDPR requires comprehensive security features in the processing of personal data, so that their manipulation, spying and third-party deletion is made impossible. These features should also be integrated into the solution of your choice.

The above points provide an orientation when choosing a suitable data management system. Of course, the available budget also plays a role. It is advisable to test the data management platforms of the preferred providers in parallel, so it is quickest to see whether they work as desired and required. The various tested scenarios show, among other things, whether time delays occur during data transport or whether important measured variables such as the number of users on a website are correctly recorded. Such tests take time (usually several weeks to months), but nothing stands in the way of an informed decision for the right data management platform.

* Christoph Berg is co-founder and managing Director of the strategy and technology consultants for data – driven marketing MINT Square.

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