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What is DMP and how it works?

A (DMP) data management platform definition includes a centralized customer data warehouse that brings together information from all advertising channels, platforms, and touchpoints. The idea behind DMPs is to help marketers aggregate diverse kinds of audience data coming from a variety of sources under one roof and gain a 360-degree view of their consumers.

With the help of DMPs, advertisers store essential data about existing customers, tap into new audience segments, and extract knowledge to target prospective audiences, optimize media buying processes, and create ads that resonate with the public.

 

How Does a Data Management Platform Work?

1) Data Aggregation

Data management platforms collect essential customer data, such as demographic and geographic attributes, cookie IDs, mobile app identifiers, history of online behavior, user interests, and more. Audience data is gathered from multiple online and offline first-party sources: websites, mobile apps, social media platforms, CRM, web analytics tools, and even TV. Additionally, DMP ad tech platforms import third-party data that can extend and enrich the outlook.

 

2) Data Arrangement

When the first and the third-party data is assembled, DPMs start to process it. The data is then sorted into segments and prioritized. DMPs structure data hierarchically, classifying it according to predefined parameters and form explicit audience segments catalog.

3) Data Analysis

Once the raw data is cleared of errors and inaccuracies and carefully segmented into taxonomies, it can be interpreted. DMPs analyze data about the user’s past clicks, downloads, preferences, and engagement. A DMP records how users interact with an ad creative and evaluate which offers get the most positive response. This information is highly important for the strategic optimization of your ad campaigns.

 

4) Data Allocation

When DMPs find correlation and causation between variables, they output meaningful patterns that are ready to be used. DMP data is then transferred directly to DSPs, SSPs, ad networks, portals, trading desks, and ad exchanges. After data is used in real life, DMPs collect response data and check the performance again. This is a constant loop of filtering, distilling, and refining big data arrays to determine the best customer for your brand.

To learn at your own pace you can also refer to our Doubleclick tutorial.