Programmatic Media Buying 101: Why DSPs & DMPs work better together?

Programmatic Media Buying 101: Why DSPs & DMPs work better together?

 

Data-driven advertising has been proven to deliver the most effective way of managing an advertiser’s spend as well as the most efficient way to monetize a seller’s digital assets.

The effectiveness of data-driven decisions –planning, selling, buying– make it necessary for both sellers and buyers to take as much control of their data as possible, and for this reason Data Management Platforms (DMPs) are a key technology for media buyers, publishers and marketers. A good DMP should not only be able to collect data from different sources, but also allow for the creation of audiences/ segmentation, consolidated reporting and campaign optimization – the place where people, platforms, partners and processes are brought together to apply audience data that is actionable. For all those marketers, media buyers and advertisers running programmatic advertising the DMP should be the source of truth for activation and analysis purposes.

 

What Can A DMP Offer?

Web and mobile experiences, speed of ad delivery, relevant ads and smooth and uncluttered paths to purchase have all contributed to the expectation of today’s consumers.  A good versus bad experience will make or break a retailer. The DMP enables advertisers and brands to craft and deliver personalized communications and offers to existing customers, while simultaneously reaching new customers (identified and informed by existing customer data) through digital advertising making sure the experience is seamless and relevant.

So what do advertisers look for when purchasing a DMP? According to John Lockmer, Director of Programmatic and Ad Operations for DuMont Project there are two main factors he considers when shopping for a DMP:

  1. How the platform will connect to his firm’s ad tech stack?
  2. How much it will cost to use?

With costs ranging from a minimum of $15,000 per month for basic usage to up to $500,000 for a license to manage up to 50 million users, advertisers are looking for alternatives which includes an integrated DSP (Demand Side Platform) and DMP solution.

“It makes it easier for us to work with them, as it does not require a yearly contract and commitment like [standalone] DMPs,” Lockmer said.

 

Tight integrations between a DMP and DSP hold a number of advantages for programmatic media buyers:

  • More efficient media activations – which means you can message your known audiences and address them with the right message
  • Advertising Efficiency – when there are clear signs that a user is no longer interested or have already bought your product, you can stop advertising to them
  • You can diversify your data to include first, second and third party sources for maximum advertising impact
  • Better understanding of the impact of your media buys across all online channels with more accurate and robust analytics
  • NO data leakage
  • If you work with Digilant, there is little or no added cost to activating the DMP

In order to execute a data driven programmatic media buy on a DMP, it’s also important to understand the different types of data available to today’s digital advertisers.

 

First Party Data

Advertisers have numerous potential first party data assets that they already own: CRM, Point of sale (POs), website, search, digital marketing and offline (point of sale, shopper visits, etc) marketing data. This data is frequently referred to as first party

data. The most important evolution for media buyers in first party data is the ability to activate it for programmatic campaigns, in addition to using the data only for email marketing or direct mail campaigns.  An necessary part of using first party data for programmatic is taking out any Personally Identifiable Information, know as PII, by using on-boarding service providers like LiveRamp – used to translate offline or email data signals to a digital user ID, so that DSPs can now translate different kinds of data for programmatic media campaigns.

 

Second Party Data

Second party data is acquired through exclusive relationships with data providers who do not sell their data in the open market. A DSP platform can help strike a deal with a data provider to enrich an advertiser’s first party data or directly activate second party data. DSPs are in a unique position to provide data intelligence to help advertisers make that data actionable. The DSP data intelligence comes from developing data science models from previous advertising campaigns that can be applied to enrich advertiser data and their campaigns.

Third Party Data

Data Management Platforms (DMPs), collect audience content consumption anonymously through access to publisher sites and sell the information as 3rd party data to advertisers. For sellers, the data that DMPs help collect is leveraged by sell side platforms (SSPs) to understand the value of their content and properties to increase monetization. For buyers, DMPs provide paid access to audience data from many publishers to which they otherwise not have access. DMP platforms that perform this data collection and distribution (“data exchange”) pay a small fee to sellers to be able to collect data and make it available for media buying platforms.

For example, BlueKai, acquired by Oracle, is one such DMP platform, the idea was to be able to monetize the data collected on both sides (sellers and Buyers), making it necessary for it to be anonymous, impartial and independent. This type of data is frequently termed third party data (3P). All DSPs have access to the same third party data for a price. But, additional layers in the media technology stack have implications. One, there is an additional fee to advertisers; and two, there is data loss as the audience universe do not exactly match between platforms. Since these different types of data are housed in different areas, a gap between first party data and third party data has been created for marketers and media buying platforms. these two data sets live in two different companies, in different technology solutions, and in different formats.

 

DSPs and DMPs Work Better Together

How can we bridge this gap? Digilant’s solution lies in its integrated DMP and DSP that bridges data management and media activation.  With all the effort, platforms, people and cost involved in executing data driven programmatic advertising, advertisers need to understand that the recipe for success is not pre-packaged, the right combined DMP and DSP will can help them achieve the right ingredients to create the right programmatic buying strategy that leads to campaigns that scale and perform.

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