July 25, 2011 The DMP Is The Audience Intelligence Engine For Interactive Marketers
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1 July 25, 2011 The DMP Is The Audience Intelligence Engine For Interactive Marketers by Joanna O Connell and Michael Greene for Interactive Marketing Professionals Making Leaders Successful Every Day
2 July 25, 2011 The DMP Is The Audience Intelligence Engine For Interactive Marketers by Joanna O Connell and Michael Greene with Emily Riley, Srividya Sridharan, Angie Polanco, and James McDavid Executive Summary Segmentation has always served as a core underpinning of traditional marketing. The benefits are myriad and well understood by those in the offline world. The very recent advent of the data management platform (DMP) now offers interactive marketers a chance to much more effectively roll out segment- or audience-based marketing programs than ever before. Marketers struggling with data fragmentation, underused data assets, and a hunger for more audience insight should consider investing in a DMP like Aggregate Knowledge or Turn. But be prepared for a time- and labor-intensive process that requires the participation of the marketing, IT, legal, and customer relationship management (CRM) or analytics departments. table of Contents Marketers Have Always Relied On Audience Segmentation Segment-Based Targeting Opportunities Abound In Digital, But There Are Drawbacks The DMP Allows For A Unified Approach To Segment-Based Marketing The Core Elements Of A DMP The DMP Creates A Single View Of The User The DMP Landscape recommendations The DMP Is The Intelligence Engine Interactive Marketers Need WHAT IT MEANS 10 Customer Intelligence Forms The Core Of The Digital Go-To Market Approach NOTES & RESOURCES Forrester interviewed several vendor and user companies, including Acxiom, Adchemy, Adobe (Demdex), Aggregate Knowledge, Allant, AudienceScience, BlueKai, Collective, Datalogix, Digitas, Epsilon, exelate, Experian Marketing Solutions, Invite Media, krux digital, Lotame, Moxie Interactive, Red Aril, Starcom, Targusinfo, Targetbase, and Turn. Related Research Documents Remarketing Done Right March 11, 2011 How Tag Management Improves Web Intelligence December 22, 2010 The Audience Targeting Imperative October 8, Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRankings, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective owners. Reproduction or sharing of this content in any form without prior written permission is strictly prohibited. To purchase reprints of this document, please clientsupport@ forrester.com. For additional reproduction and usage information, see Forrester s Citation Policy located at Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.
3 2 The DMP Is The Audience Intelligence Engine For Interactive Marketers Marketers Have Always Relied on Audience Segmentation Rich segmentation is the foundational underpinning of traditional marketing. Customer databases managed by companies like Acxiom and Experian Marketing Solutions are the norm for most large organizations. For direct marketers relying heavily on channels like direct mail, segmentation schemas are easily applied; scientific testing and optimization are de rigueur. While segmentation is also popular with brand marketers, they have been more limited in their ability to use segmentation in an applied way because they rely heavily on mass media vehicles like print and television. But whether the goal is highly targeted direct mail drops or carefully crafted brand messaging, the benefits of segmentation are well established. Segmentation helps marketers by: Informing better targeting and optimization of marketing programs. Choosing the right attributes to target, such as those that are strong predictors of user behavior like past purchases can mean the difference between effective and efficient marketing spend and wasted dollars. Enhancing customer management approaches and processes. This includes identifying and retaining high-value customers such as frequent purchasers, increasing customer value, and reducing customer churn. Driving insight across the customer life cycle. Segmentation enriches activities throughout the life cycle from acquisition through to retention. Segment-Based Targeting Opportunities Abound In Digital, But There Are Drawbacks The massive number of segment or audience targeting options now available to interactive marketers is staggering. 1 At first glance, it s been a boon to interactive marketers hungry for better targeting, with nearly 60% of large interactive marketers noting that this would cause them to increase their digital spending. 2 But several challenges keep interactive marketers from rolling out well-crafted, centrally managed segment-based marketing programs in step with their traditionally oriented colleagues, including: Data fragmentation. Interactive marketers have dozens of audience-targeting vendors to choose from, but making sense of whom to choose in order to maximize exposure to a given target audience can be confusing and daunting, not to mention time-consuming to manage multiple data buys. While demand-side platforms (DSPs) solve for the media fragmentation problem plaguing media buyers, data buyers are sorely in need of a similar centralized data buying and management system: one Moxie Interactive media director noted, We had a ton of data but no good way to act upon it. It was from so many disparate sources. Limited opportunities to use first-party data. Interactive marketers with robust and valuable offline databases wishing to bring them online for targeting have faced a mammoth task legal hurdles and internal organizational silos can be daunting. And concerns over data leakage and July 25, , Forrester Research, Inc. Reproduction Prohibited
4 The DMP Is The Audience Intelligence Engine For Interactive Marketers 3 loss of control over the management and application of proprietary data have also hindered adoption of offline to online targeting, according to Experian. Traditional site-based display remarketing, easy to both launch and manage, has often played the go-to role as interactive marketers primary first-party targeting mechanism, leaving preexisting offline segmentation work sitting on the sidelines. 3 Limited audience insight. Interactive marketers we speak to are hungry for more insight into who is seeing and responding to their digital campaigns, not to mention who is visiting and interacting with their owned media touch points (such as their websites). But this data has been hard to dig up, or is provided in an ad hoc manner at best, typically by vendors. Moxie told us, We were looking for better site-side analytics and a way to overlay that with audience segmentation insights for better matching of messaging to the user. The DMP Allows For a Unified Approach to Segment-Based Marketing The DMP addresses the key challenges facing an interactive marketer wishing to use a segment- or audience-based approach to digital marketing. The power comes from taking a unified approach to audience buying and management by relying on a centralized system for gleaning audience insights as well as accessing and combining different data sets together to create unique, meaningful segments that can be made actionable across digital channels like display, on-site, and . Forrester defines a DMP as: A unified technology platform that intakes disparate first-, second-, and third-party data sets, provides normalization and segmentation on that data, and allows a user to push the resulting segmentation into live interactive channel environments. The Core Elements Of A DMP Several technology providers offer one or more DMP capabilities, and certainly a marketer can endeavor to combine offerings from several vendors to create a custom end-to-end DMP solution. However, Forrester believes that a complete DMP technology features all of the following capabilities (see Figure 1): Data intake and aggregation: the ability to ingest and aggregate data from first-, second-, and third-party on- and offline sources in a unified (and increasingly programmatic) manner. 4 Segment building and manipulation: functionality that allows a marketer to flexibly combine data sources to build custom audiences. Universal container tag: A universal tagging solution provides many benefits including consistent and accurate data collection, increased tagging flexibility, and reduced organizational friction , Forrester Research, Inc. Reproduction Prohibited July 25, 2011
5 4 The DMP Is The Audience Intelligence Engine For Interactive Marketers Self-serve user interface: web-based interface for direct access to tools, features, and centralized reporting and analytics (see Figure 2). Linkages to relevant channel environments. Integrations with relevant channels including site side, display, and today, with search and video likely to soon follow that allow a marketer to find, target, and serve relevant messaging to segments. Figure 1 A DMP Sits Between A Marketer s Disparate Data Sets And Its Live Marketing Channels Data inputs Site analytics Data management platform Data intake Live channels CMS/site optimization tool campaign database Search data Display (ad server) User interface Data normalization Segmentation and scoring Tag management Linkages to relevant channels Display programs Search management tool Video Analytics/insights Mobile Offline (CRM) Addressable TV Source: Forrester Research, Inc. July 25, , Forrester Research, Inc. Reproduction Prohibited
6 The DMP Is The Audience Intelligence Engine For Interactive Marketers 5 The DMP Creates A Single View Of The User Marketers have traditionally managed multiple views of a single user, housed within channelspecific execution tools and individual media or technology partners. The DMP becomes the repository of a marketer s own user-level data drawn from multiple sources. This centralized view creates many benefits. It: Enables data freedom and portability. The DMP allows marketers the opportunity to develop proprietary (and private) audience segments that exist outside of individual media partners and channel execution tools. This allows marketers to easily move between execution partners. Reduces waste. Marketers can use the tool to identify audience overlap among partners, resulting in a more efficient budget allocation among media and data vendors. Enables brand consistency across channels. Through the application of channel-independent audience segments, marketers can more easily create brand experiences that are both customized and consistent across channels. 2011, Forrester Research, Inc. Reproduction Prohibited July 25, 2011
7 6 The DMP Is The Audience Intelligence Engine For Interactive Marketers Figure 2 Rich Reporting Is Paramount For Marketers Craving Audience And Campaign Insight Sample report provided by Aggregate Knowledge Sample report provided by BlueKai Source: sample reports provided by Aggregate Knowledge and BlueKai Source: Forrester Research, Inc. July 25, , Forrester Research, Inc. Reproduction Prohibited
8 The DMP Is The Audience Intelligence Engine For Interactive Marketers 7 The DMP Landscape The data management platform landscape is becoming increasingly crowded as vendors with very diverse backgrounds and areas of expertise looking for new ways to provide value and increase the likelihood of client stickiness shift into the DMP space. Accordingly, Forrester has identified four primary categories data providers, ad networks/media platforms, pure plays, and marketing service providers (MSPs) classified based on each company s legacy business model and traditional area of focus (see Figure 3): Figure 3 There Are Four Key Categories Of Players, Differentiated By Legacy Business Models Category Description Who does it make sense for? BlueKai exelate Lotame Data providers Companies that have traditionally served as providers of third-party data, be it their own proprietary segments or those of partner vendors. Now moving aggressively into the DMP space to give users a platform upon which to better manage their first, second, and thirdparty data buying and optimization. A good fit for marketers looking for one-stop shop access to multiple third-party data providers and who don t want to take on the responsibility of forging and managing relationships with data providers directly. BlueKai serves as a one-stop shop for marketers looking to easily access multiple third-party data providers through a single relationship. Now featuring improved campaign analytics with recent acquisition of TrackSimple. Segmentation scheme dictated by focus on intent data. Strong buy-side focus. exelate, like BlueKai, offers both proprietary segmentation and access to other third-party data providers through a single interface. Much heavier focus on the sell-side, or publishers. Particularly useful for data-rich publishers wishing to better monetize their own data. Lotame s Crowd Control platform features a highly intuitive user interface and a relatively easy implementation. Its segmentation scheme comes from a legacy of social data segments but has now expanded and offers room for some customization. Category Description Media platforms/ad networks Companies that come from a legacy of helping marketers execute targeted display advertising campaigns. Several are now making their own internal management platforms (e.g., those used by internal staffers for audience/campaign management, analytics, etc.) available to external customers in an effort to expand their value proposition. Who does it make Marketers looking for pre-baked media relationships may want to look here. sense for? AudienceScience Strong legacy in the audience targeting space, with several years of experience under their belts and a large pool of ad network customers from which to draw. Direct connection between platform and media outlets means seamless buying. Some clients cite challenges with the flexibility of the DMP platform. Collective Media Turn Now described as the audience buying engine, Collective has traditionally been thought of as one of a small handful of premium ad networks. Collective offers solid, scalable technology built upon the AppNexus platform. Current clients many of them other ad networks primarily use the platform for audience analytics. After a brief life as an ad network, Turn moved aggressively into the DSP space, offering a self-serve audience buying and management platform to media buyers. It is now exposing additional features and functionalites to offer an accompanying integrated DMP solution. Turn focuses on large companies who need high-volume data processing and warehousing Source: Forrester Research, Inc. 2011, Forrester Research, Inc. Reproduction Prohibited July 25, 2011
9 8 The DMP Is The Audience Intelligence Engine For Interactive Marketers Figure 3 There Are Four Key Categories Of Players, Differentiated By Legacy Business Models (Cont.) Category Description Who does it make sense for? Demdex krux digital Red Aril Pure plays A small handful of companies come to the party without the baggage of legacy business models but rather have focused on building out standalone data management platforms from their advent. They don t benefit from preexisting customer relationships, but they do benefit from a business model and focus that doesn t face biases or conflicting interests. The best choice for marketers looking for a high degree of flexibility and customization Recently acquired by Adobe and being integrated into the Omniture suite. Traditionally sell-side focused, the Adobe acquisition may open the door for increased buy-side adoption. Offers a very flexible system with a segmentation scheme that can be fully customized and flexible data collection capabilities. Features a robust and user-friendly interface. Primarily focused on serving publishers but beginning to work with advertiser clients. Strong emphasis on data security and protection. Has a mixed client-base, consisting of both advertisers and publishers. Very strong on data scoring. Less intuitive interface than some other DMPs. Category Aggregate Knowledge Audience analytics Aggregate Knowledge's strength is in bringing robust campaign analytics together with audience data management capabilities. Heavy "buy-side" focus to date, though recently inked a deal with supply side platrform Admeld. Intuitive interface and rich reporting capabilities. Customers note that Aggregate Knowledge is very flexible and easy to work with. Category Description Who does it make sense for? Acxiom Experian Marketing Solutions MSPs Vendors who boast a long history of experience in data management, modeling and execution in the offline world are naturally attracted to the possibility of extending those core services online. Generally missing some core technology components required, MSPs must partner with, whitelabel or acquire DMP technology to provide an end to end solution. Marketers with preexisting MSP relationships may find that the simplicity that comes with working with a current partner trumps the potential advantages other DMPs may offer. Taking a very progressive stance on building out a complete DMP offering, Acxiom is actively partnering with technology providers to create the desired end-to-end system. Just inked a deal with Turn to round out its offering. Benefits from being both a marketing service provider and a marketer (owning, for example, Freecreditreport.com), so able to road test the offering in its own marketing efforts. Source: Forrester Research, Inc. July 25, , Forrester Research, Inc. Reproduction Prohibited
10 The DMP Is The Audience Intelligence Engine For Interactive Marketers 9 Recommendations the DMP is The intelligence engine interactive marketers need The interactive marketer is sorely in need of a centralized intelligence engine that allows for a unified view of the customer, regardless of channel. The data management platform, or DMP, may well be that engine finally allowing marketers to lead with a customer-centric, rather than channel-centric, approach to marketing. Marketers ready to take the plunge and invest in a DMP solution should: Do an audit of current data assets and data needs. Assess the potential value in porting your own data into a digital environment. What kind of offline data do you have? What size is your data set? What would be the value of using it in a digital environment? Is there on-site data you re not mining but would like to? If your answers show that you have a mix of firstand third-party data sets that you want to use across channels, particularly display, then a DMP is a good option. Examine existing marketing technologies to identify what, if any, gaps exist. Your CRM team may already have a robust relationship with an MSP like Acxiom or Experian that you can leverage for your own digital audience targeting and management. If such a relationship exists, get the CRM and interactive marketing teams together and engage in a joint conversation with your MSP. If the solution feels incomplete, look elsewhere or push your MSP to partner with a DMP like Aggregate Knowledge. Treat this as a marketing technology decision rather than a media buying decision. It is a large investment from a time, energy, and monetary standpoint. There may be merits to testing multiple DSPs, but plan on rolling out just one DMP. The decision should be shared across interactive marketing, analytics, and CRM, though ultimately, ownership of the DMP relationship is a decision each organization needs to make individually. Pull in all the key players early in the process. Marketers will need to work with IT (tagging), CRM and analytics (data, access to offline database, analytical capabilities), legal (data transfer), and, depending on your situation, your media agencies, in rolling out a DMP. So the sooner the key stakeholders are brought together, the easier and faster the process will be. Be mindful of the operational burden and what your organization is capable of taking on. Do you need a high level of customer service once it s up and running? Or do you want a tech platform solution? Do you want a one-stop shop for accessing third-party data, or do you prefer to strike and own the individual data relationships yourself? Depending on your answers, you may need a high level of support and customer service from your DMP and should choose your partner accordingly. Or depending on internal resources and the nature of your agency relationship, you may determine that the day-to-day DMP management is best left to the agency. 2011, Forrester Research, Inc. Reproduction Prohibited July 25, 2011
11 10 The DMP Is The Audience Intelligence Engine For Interactive Marketers WHAT IT MEANS CUSTOMER INTELLIGENCE FORMS THE CORE OF THE DIGITAL GO-TO MARKET APPROACH First-party data becomes king in digital marketing. The past three years have seen an explosion of third-party data providers enter the market selling everything from demographic to behavioral to social data. We expect that market to condense and prices to drop as marketers turn to it merely to fill in gaps in their audience segmentation which is increasingly built upon first-party data as marketers seek to maintain competitive advantage through deep knowledge of their customers not to form the core of their targeting strategies. 6 Data management, reporting and attribution, and media buying tools combine. DMPs are largely standalone technologies today, but several are already offering reporting and attribution tools as part of their DMP platforms or have expanded from media management to media and data management. As marketers tire of the technical and operational burdens of managing disparate systems, we expect DMPs to go back to the future recombining audience data, analytics reporting, and multichannel execution, but this time with audience segmentation rather than media data at the core. Supplemental MATERIAL Companies Interviewed For This Document Acxiom Adchemy Adobe (Demdex) Aggregate Knowledge Allant AudienceScience BlueKai Collective Datalogix Digitas Epsilon exelate Experian Marketing Solutions Invite Media krux digital Lotame Moxie Interactive Red Aril Starcom Targetbase Targusinfo Turn July 25, , Forrester Research, Inc. Reproduction Prohibited
12 The DMP Is The Audience Intelligence Engine For Interactive Marketers 11 Endnotes 1 For an overview of the major categories of audience targeting opportunities now available and a sampling of vendors in each category, see the October 8, 2010, The Audience Targeting Imperative report. 2 Fifty-eight percent of large marketers (with revenue more than $500 million) note that better targeting of ads would encourage an increase in their companies investment in digital marketing, according to Forrester s research. Source: May 2010 US Interactive Marketing Online Survey. 3 Remarketing can serve as the workhorse of any marketer s display campaign if deployed and managed correctly. For more information on how to maximize the effectiveness of your remarketing campaign, see the March 11, 2011, Remarketing Done Right report. 4 In the case of a publisher using a DMP technology, there may be second-party data, or advertiser data, which can be used as an additional input in building audience segments. 5 For more information on the benefits of tag management, and an overview of the tag management landscape, see the December 22, 2010, How Tag Management Improves Web Intelligence report. 6 Forrester analyst Josh Bernoff recently argued that marketers hoping to stay relevant to consumers, not to mention stay ahead of the competition, in this age of empowered customers MUST become customer obsessed. This requires that they deepen their real-time Customer Intelligence, among other things. For more details, see the June 6, 2011, Competitive Strategy In The Age Of The Customer report. 2011, Forrester Research, Inc. Reproduction Prohibited July 25, 2011
13 Making Leaders Successful Every Day Headquarters Forrester Research, Inc. 400 Technology Square Cambridge, MA USA Tel: Fax: Nasdaq symbol: FORR Research and Sales Offices Forrester has research centers and sales offices in more than 27 cities internationally, including Amsterdam; Cambridge, Mass.; Dallas; Dubai; Foster City, Calif.; Frankfurt; London; Madrid; Sydney; Tel Aviv; and Toronto. For a complete list of worldwide locations visit For information on hard-copy or electronic reprints, please contact Client Support at , , or clientsupport@forrester.com. We offer quantity discounts and special pricing for academic and nonprofit institutions. Forrester Research, Inc. (Nasdaq: FORR) is an independent research company that provides pragmatic and forwardthinking advice to global leaders in business and technology. Forrester works with professionals in 19 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs. For more than 27 years, Forrester has been making IT, marketing, and technology industry leaders successful every day. For more information, visit
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