While the DMPs Fiddled, the Marketers got Burned

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Last week’s Ad Exchanger Industry Preview brought together the CEOs of four companies with data management platform (DMP) offerings to talk about the state of the industry and what to expect in the year to come. They did just that, but toward the end of the panel the discussion shifted inward, moving to inside-baseball comparisons that did little but further distort marketers’ perception of the industry. The source of disagreement was the effect of a DMP provider also offering an integrated demand side platform (DSP).

Based on the tremendous interest incited by the panel, and an article summarizing the event, I’ve put together a few of the major points to consider when deciding between independent and integrated DMPs.

Data Loss and Connectivity

A DMP builds audience data by collecting and categorizing data from first- and third-party sources. To target bids on those audience segments, the DMP needs to send the information to a DSP. Independent studies show that there is anywhere from 20% to 40% churn in that data if the DMP is sending the information to a different vendor.

Now, there’s a debate within the debate here about the cause and significance of data loss between a disconnected DMP and DSP. It stems from the fact that neither the DMP nor the DSP is responsible for the data lost in translation. There are tagging systems that allow the audience data to be communicated without any discrepancies, but tagging isn’t perfect in execution, so the hope of an independent DMP sealing data leaks is only theoretical.

The fact of the matter is that data loss exists and it’s an inefficiency, and whether or not the DMP is at fault is completely irrelevant. Deciding if it’s a tagging issue or an industry-wide implementation issue doesn’t matter either, the results of the issue matter – up to 40% data loss matters. For the marketer, knowing the winner of the data loss blame game doesn’t affect the potential for inefficiency in an independent DMP selection.

Media Planning

Having immediate access to a connected DSP offers some great advantages to a DMP, and in turn, the marketers that use it. One example is the ability to forecast the audience before a marketer spends a single penny. That’s made possible only because if the DSP sees upwards of 100 billion ad opportunities a day, it can share not only the results of the successful ad bids but information about the ones that were lost.

What a marketer gains from that colossal amount of information is the ability to accurately predict if their tactics will meet their stated objectives before the campaign begins. A statistically stratified sample of the lost ad bid data is added to the won bids to create the projection, a capability lacking for DMPs without accompanying DSP offerings. Without immediate access to information about the unsuccessful bids, pure-play DMPs are left to make projections based on the much more limiting won bid data.

Flexibility

A frequent argument in favor of an unbundled DMP is that it offers the flexibility to choose every individual tactical piece in a programmatic strategy. A marketer can choose a DMP, then a DSP, then perhaps a separate vendor for attribution. However, this adds much more unnecessary complexity. Just as you wouldn’t use separate vendors for your SEM strategy, you don’t benefit by using different vendors for your DMP and DSP strategy. Having your DMP and DSP on the same platform means no loss of data, and, importantly, it simplifies the marketing workflow, allowing the marketer to focus on strategy and creative, not on technology integration issues.

Simplicity

Last, but certainly not least, the biggest difference between integrated and non-integrated DMPs isn’t technical or ideological, but practical – it’s the difference in a marketer’s experience. An integrated DMP and DSP platform offers a marketer the opportunity to minimize the complexity of the buying process without sacrificing the benefits of the technology. Instead of working with three or more separate companies, relaying objectives and depending on each company’s ability to communicate with the others, a marketer works with one.

The simplification of the process means more than added convenience. It opens up greater opportunities for marketers to be truly creative with their campaigns. Integration and the simplicity it brings means less time learning how to connect and use tools and more time using them. It’s time we as an industry stop the infighting and arguments that confuse our customers and start focusing on delivering clarity and results that matter.

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