What is a Data Management Platform?
A Data Management Platform or DMP can be defined as – a mechanism of gathering organized or unorganized data from a scope of internal or external sources. Then this data is co-ordinated and stored in a database for further use.
Forrester Research defined a DMP as "a unified technology platform that intakes disparate first-, second-, and third-party datasets, provides normalization and segmentation on that data, and allows a user to push the resulting segmentation into live interactive channel environments."
You can learn more about DMPs here.
The great thing about DMPs is that they can be used to combine your first-party data with any third-party data source to create richer segments to be used for digital advertising.
A DMP becomes all the more crucial for retailers because it allows them to combine any offline data source like POS, Purchases, CRM data, Loyalty programs with online data sources like newsletter signups, mobile, social, and browsing history. With the amount of customer data created through the multiple touchpoints that the retail industry provides, it becomes imminent for retailers to combine all of them to make more holistic experiences for their customers.
How 2020 affected the retail industry?
In 2020, total worldwide retail sales declined by 3.0%, to $23.9 trillion, amidst the recessionary conditions set worldwide. At the same time, worldwide retail eCommerce sales grew 27.6% for the year, for a total of $4.280 trillion, source - eMarketer
This means that the pandemic has expedited digitization for individuals as well as enterprises. All major brick and mortar retailers strengthen their online presence to avoid losing their customers who are now choosing the convenience and choices available to them by the online players.
With more digital touchpoints, retailers need to adapt to the data & advertisement strategies that will help them get closer to their customers in the digital world.
The DMP combined with Demand Side Platforms (DSPs) can be the winning mix for retailers. Marketers can push the segments stored in a DMP into a DSP to create extremely targeted programmatic advertising campaigns to achieve better ROIs.
Here are four ways that a combination of programmatic advertising, a DSP, and a DMP can benefit retail players-
Retailers can slice and dice their customers based on numerous factors ranging from their transactions history, demographics, interests, income level to browsing history, wish lists, and engagement with previous campaigns.
This helps retailers segment their customer base into different segments based on the criteria of their choice and personalize communication in their programmatic advertising accordingly. Customers seeing ads tailored to their needs and preferences are bound to engage more with the campaigns and respond better to the call to action, resulting in better ROI.
- Reducing Churn
Getting back existing customers is always cheaper than acquiring new ones. Marketers are always on the lookout for strategies to get to the customers that have not been making purchases in recent times and engage with them.
Cart abandonment is another primary concern for online retailers and eCommerce marketplaces. Much time, resources, and money have gone into bringing the customer up to the point of adding products to their carts. Now, if they leave without making that purchase, the marketers need to start from scratch to bring them again.
Using DMP, retailers can create such customers' segments and deliver programmatic campaigns with ads (based on their past purchases & interactions) that they think might entice them to come back.
- Retargeting Customers
A DMP also becomes crucial to activate website and app visitors. As discussed, a DMP can create customer segments based on all the data available to retailers.
On integration with multiple DSPs, marketers can push these segments to various platforms and reach out to these customers with personalized messaging and offer, based on their buying stages, across the internet.
- Find Lookalike Audiences
As a marketer, you would be interested in attracting more prospects similar in needs and aspirations as your best customers. Using your existing customer data and a DMP, you can easily reach out to such segments using programmatic advertising. DSPs that also employ data modeling and machine learning can take out the attributes of the customer segments that you want to replicate and target similar groups through programmatic advertising.
In conclusion, with more and more data generated across multiple touchpoints, it has become evident that data management solutions are gaining momentum across industries, and retail is at the forefront. And with digital rapidly becoming the preferred medium for customers to interact and make purchases, a combination of DMP and programmatic advertising will soon become the go-to marketing technology suite for retailers.