In 2020, data could be justifiably described as a company’s most valuable asset. In such a digitally-driven business climate, any business that isn’t leveraging its data to its full potential is really missing a trick!
Why is data so indispensable? There are a few reasons. First of all, it can help businesses truly understand their customers. By analyzing customer behavior, you can generate actionable insights about how they experience your company.
This can help you tailor your marketing to your customers’ preferences. Customers increasingly expect a customized experience when interacting with a business, and data is used to determine how it should be delivered.
It can also be used to improve operations. Data can provide an overview of how a business is performing. If the data shows delays or unnecessary expenses, changes can be made quickly to improve efficiency levels.
Data can empower you to plan more strategically too. Business savvy remains important, of course, but these days, there’s an increased understanding that decisions should be rooted in evidence instead of instinct alone.
To enjoy all these advantages, you first need to handle your data correctly. This is where a data management platform comes in!
What is a data management platform?
Data management platforms, or DMPs, are platforms where data can be collected and organized. The type of data that they collect varies: it could be first, second, or third-party data, and it could come from online or offline sources!
The data collected by DMPs are used to inform data-driven marketing. Insights are generated from data analysis which guide strategy and decision making. Before data can provide this value, it has to be sorted and transformed into a usable form. After all, you can’t do much with a pile of raw data!
This is what’s great about DMPs. They don’t just collect the information; they also organize it. They then make it accessible to other platforms, which might include demand or supply-side platforms. At this stage, it is used for a range of purposes: targeted advertising and personalized content are just two potential outcomes.
You might visualize a DMP as the pipeline system that lies behind advertising technology. It connects a company’s many different platforms so that data can be integrated into every aspect of a company’s performance.
How do DMPs function?
DMPs work by collecting data from a diverse range of sources. These might include mobile apps, in-person points of sale, web analytics, or customer relationship management programs. Companies have data in all of these disparate locations, but a DMP brings it all together.
You might have first-party data that was directly generated by your customers through their clicks or sales. From this, you could drill down into demographic information, or you could further investigate their interests. Once the DMP organizes the data, you can use it to target specific groups more effectively.
The data is organized into different categories by the DMP’s hierarchy. You can adapt the rules of the hierarchy based on your business model and what you want to achieve with your data. For example, you might choose to separate it according to your product lines or specific periods.
The reason modern businesses find DMPs so essential is that they keep all of your audience data in one convenient location, making it quick and easy to understand more about your customers and your company.
What can be done with the data?
Once the data has been collected by a DMP, it can be subjected to these processes.
This is when the data is categorized according to your hierarchy. You decide how the data is organized based on what you want to use it for. This means you have to decide in advance what you want to achieve with your data.
Do you want to know how well your digital content is performing? Do you want to understand when in the week customers are most likely to purchase? Define your questions to categorize your data effectively.
Have you ever been amazed by adverts online that seem to know exactly what you want? There’s no great mystery behind it; companies are simply using data to accurately target you.
If you’re trying to reach a specific demographic with your advertisement, you can use your data to do so effectively. That means you can run several campaigns, each one aimed at a different kind of customer.
- Insight generating
Once your data is in its different hierarchical categories, you’re able to analyze chunks of it to identify trends and patterns of behavior.
For example, you could use audience profile reports. These share information about the different types of people that are accessing your services. Your future messaging can be tailored to your audience once you know them better. If you notice that customers are dissatisfied with a particular aspect of your service, you can use that insight to make necessary changes. Issues like this may otherwise go unnoticed!
There’s no point investing in DMPs if you’re going to ignore the knowledge that your data provides. There are integration tools that allow you to incorporate data into other aspects of your business seamlessly. You decide the use cases for your data. The possibilities are endless!
Potential use cases for DMP data
You can use your data in any way imaginable, as long as it falls within data legislation. Three popular ways to use DMP data are:
- Targeted advertising: It can inform your advertising campaigns so they more effectively target your average customer.
- Audience expansion: It can help you identify potential areas of growth and new demographics to target.
- Customization: It can teach you about your customers so you’re able to personalize processes to their preferences.
Who could benefit from a DMP?
Every business should be thinking carefully about how they can maximize their data. It’s only likely to become more important as digitalization advances. That means professionals of every industry could benefit from a DMP, and leadership could certainly use one to make more informed decisions.