Article

Michael Nutley
Michael Nutley 13 February 2019

Evolution of the DMP: how the modern data management platform is transforming the customer experience

The Evolution of the DMP report, produced by London Research in partnership with Adobe, looks at how data management platforms have evolved from tactical media-buying tools to strategic platforms at the heart of enterprise customer experience programmes.

The most important person in 21st century business is the customer. The internet has switched things around so that business is no longer about what companies want to sell, it’s about what consumers want to buy.

And these consumers are increasingly demanding and fickle. They measure every online brand experience they have against the best in the world. They expect those experiences to be personalised and based on the history of their interactions with the brand, across all channels. And they expect them to be delivered on whatever device they happen to be using at the time. And if all that doesn’t happen in milli-seconds, they’ll click away to another brand that can deliver.

So, the biggest challenge for 21st century marketers is to meet - and ideally to exceed - the expectations of these consumers. According to the Adobe 2018 Digital Trends Report, published in association with Econsultancy, 19% of in-company marketers see optimising the customer experience as their biggest opportunity.

On top of that, 16% said their biggest opportunity was “data-driven marketing that focuses on the individual”, while a further 14% cited “creating compelling content for digital experiences”. In other words, around half (49%) of the marketers who took part in the survey were most excited by some aspect of creating high-quality, personalised experiences for their customers.

The common perception is that the way to do this is through data, but that’s only half the story. Businesses also need a way of bringing together all that data and turning it into information about how segments of their customer base behave, information that can then be used to power the marketing technology that delivers the customer experience for those segments. The tool that does that is a data management platform (DMP).

Joining up the customer journey

Imagine someone comes to your website and browses through a few pages. Your web team will collect data on that visit in the form of web logs. The site will place a cookie on the person’s browser - after obtaining informed consent, of course - which means your web team will also know when that person comes back to the site, and what sites they visit before and after yours.

If they sign up for your email newsletter, your email team will have some identifying data about them, and will also start collecting details about how often they open your emails and whether they respond to the content. Then, if our imaginary person buys something from your site, your ecommerce team will collect data about their transactions. And if they post a review of what they’ve bought on your site, their comments will be recorded and filed by the social media team.

That’s a fairly simple example, with only four touch points and no external data. But if your business is still operating in silos, the worst-case scenario is that the data collected at each touchpoint will be held by a different team, in a different database, in different formats and using different software.

Such fragmented data has two main effects. Firstly, it prevents the delivery of a consistent, coherent user experience; instead customers get a different experience at each touchpoint, and none of them relate to the totality of that customer’s previous interactions with the business.

And, secondly, it also reduces the efficiency of the company’s marketing efforts. It’s long been observed that the more channels customers and prospective customers use to communicate with a company, the more likely those customers and prospects are to transact. But, if messages being sent through different channels are inconsistent or contradictory, that multichannel benefit is diminished or lost.

These are the problems the DMP is designed to solve.

What a DMP does

A DMP allows a business to do three things: bring together data from across the operation; stitch that data together to create a single view of all that business’s customers; and segment those customers into groups to form the basis for targeted communications in the future, whether through online advertising or, increasingly, through direct communications.

And, of course, data about the impact of those communications flows back into the DMP, updating the profiles it holds and improving the relevance of communication in a virtuous cycle. More detailed data enables companies to split their customers into smaller segments, enabling better personalisation and increasing the likelihood of achieving the desired response.

But the benefits of a DMP go further than this. The act of bringing data together from across the organisation to feed into the DMP encourages people to think beyond their own silos, to consider their role in the overall customer journey, and to adopt metrics based on the business as a whole, rather than just their own department or channel.

Allied to this, a DMP is also a powerful tool in attribution modelling. By bringing together data collected across the customer journey, it allows businesses to understand not only what happens at each touchpoint, but how communications in one channel affect subsequent behaviour in all the others. And it enables them to experiment with the budget for each channel in order to optimise marketing spend.

Another, perhaps less obvious, benefit of a DMP is its role in compliance with the EU’s General Data Protection Regulation (GDPR). The regulations require companies to show consumers the data they hold about them on demand. That’s a challenging task if data is stored in different locations around the company. But things become significantly easier if it’s all been brought together in a DMP.

What’s more, a DMP also helps the company manage permissions around the data it has collected. So, if a marketer is preparing a new campaign, the DMP can not only tell them who will make up the most receptive audience for their messages, but also whether they have permission to contact those people in the first place.

Looking further ahead, the work required to prepare a company’s data for analysis, particularly that driven by AI, is the same as that required to ready it for a DMP. So, by employing a DMP, not only are you immediately improving the quality of your marketing communications, you’re preparing yourself for the marketing of the future.

In fact, AI is not just the future of marketing, it’s the next step for DMPs. The latest platforms use AI to look for patterns in the customer data that are invisible to humans because of the sheer number of records involved. These patterns can then be used as the basis for better segmentation of the audience and for smarter lookalike modelling. And the technology also allows marketing segments, which used to be seen as static, to be changed and updated as the data changes.

DMPs in action

Companies adopt DMPs for different reasons. The roots of the technology lie in programmatic advertising and the use of data to improve online media buying. This was why UK broadcaster Sky invested in one. It wanted to avoid bombarding existing subscribers with online ads for its service, improving the customer experience and making the media spend more efficient.

“The biggest initial use case was the media efficiency gain, where we are not wasting paid impressions to sell Sky to customers who already have Sky. The ability to identify those people and exclude them from any prospect activity did not just drive efficiency but also led to improved brand metrics. Being able to identify our customers online wherever they are also enabled us to customise their digital experience,” explained Sandy Ghuman, Audience Targeting Capabilities Consultant, Sky Digital Decisioning.

By contrast, Belgian outdoor clothing and equipment retailer A.S. Adventure already had a content management system, an email platform, a system for personalisation and an analytics package, so it wanted a DMP to allow it to build a single customer view and to segment its customers, and then use those segments as the basis for the operation of the rest of its martech systems.

But, as A.S. Adventure digital director Thomas Vaarten points out, a DMP can do much more. “At this moment, the DMP is just a tool, and in my opinion it needs to evolve to be the centrepiece in which communication is starting with a customer across all departments, so not only the performance marketing team, but also CRM, customer service, and so on.”

This is the real power of DMP technology, to provide the underpinning that turns the idea of a customer-centric business into a reality. Not just by breaking down organisational silos, or by unifying the metrics by which departments are measured, but by making every element of the whole company think about their impact on the customers’ experience.

Customers see no distinction between a brand’s presence on the web, on mobile, in an app or on social media; neither does a DMP.

Download the Evolution of the DMP report, written by London Research in partnership with Adobe, to learn more about how a modern data management platform can help organisations improve the customer experience (registration required).

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