PICKING THE RIGHT DMP WHAT MARKETERS WANT SPONSORED BY
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1 SPONSORED SPONSORED CONTENT PICKING THE RIGHT DMP WHAT MARKETERS WANT SPONSORED BY
2 WHAT MARKETERS WANT Data Strategies That Pass the Real-World Test Since its digital beginnings, the data management platform (DMP) has been hailed as the cure-all for the modern marketer s data woes. For marketers deluged with numbers and information, the DMP promised to perform three critical tasks: onboard first-party and third-party data, construct audience segments, and inform smarter marketing actions based on those segments and data. The DMP would act as a single collection point for data a consumer s interactions with a brand through different channels, on different devices, in different locations. Once collected and loaded into the DMP, this customer data would be merged with the vendor s channel and household-level customer information to enable market segmentation, audience development and media planning. And, ideally, this would all happen on a single dashboard. Many marketers bought into that vision. In an exclusive survey conducted jointly with Neustar on the evolution of the DMP, Ad Age interviewed 290 respondents 56.6% agencies and 43.4% marketers, with 86.6% of respondents working in the U.S. Among marketers surveyed, about half, or 22.1% of total respondents, are product or service marketers; 7.2% are in finance, insurance, legal or real estate; 3.4% are in retail; and the rest are divided between entertainment, travel, food, telecommunications and other industries. Overall, 50.4% of respondents said they have invested in a DMP of the remaining half, virtually all expect to make a similar investment within the next two years (Figure 1). But our survey also uncovered profound disappointment in how well DMPs are meeting marketer needs and expectations. HALF OF ALL MARKETERS ALREADY HAVE A DMP 78.3% of marketers either already have or will have a DMP by the end of Figure % n Yes, we have a DMP. 50.4% n Yes, we plan to implement a DMP in the next 12 months. 27.9% n Yes, we plan to implement a DMP in the next months. Base:
3 Only 23.3% of respondents currently using a DMP said they strongly agree that they are using their DMP to its fullest capacity. Moreover, only 30.2% said they are very satisfied with the results they are getting from their DMPs. Those numbers indicate that the promise of DMPs currently remains more a vision than a reality. Furthermore, while survey respondents say that it s important for the DMP to be integrated into their current channels, as seen in Figure 2, their actual satisfaction with that integration trails far behind in each channel. Likewise, as shown in Figure 3, their top goals when implementing a DMP driving higher ROI, driving audience analytics and optimizing integrated marketing programs, for example have not yet been satisfied by the DMP s performance. But an evolution among DMPs, combined with new approaches by marketers, offers hope that this vision can soon become reality. TODAY S DMP INTEGRATIONS DON T LIVE UP TO EXPECTATIONS How important is integrating a DMP with your current channels, and how satisfied are you with that integration? Figure 2 n Importance n Satisfaction Website/mobile app Mobile Search CRM Earned social Video Display Paid social Point of sale TV SMS/MMS Call center 24.5% 21.7% 25.1% 23.9% 28.3% 19.3% 22.4% 30.1% 23.5% 20.4% 18.7% 16.6% 19.3% 46.3% 43.5% 41.0% 36.9% 61.7% 61.4% 60.0% 59.3% 74.5% 72.0% 69.6% 68.7% 68.2% 0% 10% 20% 30% 40% 50% 60% 70% 80% Base: 290; based on 8-10 ratings on a scale where 1 is not important at all or not at all satisfied and 10 is extremely important or extremely satisfied. 3
4 HOW DMPS MEET MARKETERS EXPECTATIONS What uses were you trying to enable by implementing a DMP and were they successful? Figure 3 n Why they picked their DMP n Success with DMP Drive higher ROI 45.5% 63.4% Drive audience analytics Optimize our integrated marketing programs 46.2% 49.0% 55.2% 54.8% Create a targeting profile of audience Obtain robust and actionable customer insights 53.4% 50.3% 53.4% 48.3% More effectively centralize, organize and leverage first-party online and offline audience data for targeting 42.8% 50.7% Optimize CRM programs Optimize existing communication channels Develop 360-degree view of our audiences, including offline Optimize creative and messaging Enable data-driven decisions to media buying Optimize consumer experiences on my site/app 35.5% 36.2% 49.7% 46.6% 47.9% 48.6% 46.2% 45.9% 47.9% 44.1% 48.6% 43.8% Evaluate effectiveness of emerging channnels 40.0% 40.7% 0% 10% 20% 30% 40% 50% 60% 70% Base:
5 WHY MARKETERS ARE FRUSTRATED Survey respondents reported investing in a DMP for a variety of reasons. Top among their criteria are reporting and analytics; the user interface and ease of use; the ability to do market analysis and segmentation, and audience planning and analysis; data ownership and security; and offline and online data collection. However, marketers already using a DMP say they are frustrated by a variety of factors. Survey respondents cited as top challenges: Technology limitations. Data quality issues. Vendor limitations. Data security issues. In addition, Neustar executives say marketers have been frustrated by the long cycles required to deploy a DMP. Although a DMP investment is predicated on a strong return on investment, marketers find that measuring the actual efficiencies can be difficult with large, decentralized media buying structures. For the marketers who use DMPs, these challenges have made it difficult to realize the ultimate vision and purpose of the DMP: combining a raft of disparate data including CRM data, call-center or customer-service information, online and offline purchases, warranty cards, etc., for audience management and planning and media optimization. As a result, their level of satisfaction with their DMPs remains low (Figure 4). MARKETERS DMP SATISFACTION How satisfied are you with your current DMP s performance in the following areas? Figure 4 35% 30% 25% 20% 15% 33.6% 29.4% 28.1% 26.7% 23.2% 19.2% 10% 5% 0% Ability to measure audience performance across devices Scale and effectiveness of onboarding first-party data audiences Ability to comprehensively measure audience performance across channels, including offline Ability to syndicate custom audiences at scale across devices Scale and effectiveness of third-party data audiences Ability to syndicate custom audiences at scale across channels, including offline Base: 290; based on 8-10 ratings on a scale where 1 is not at all satisfied and 10 is extremely satisfied. 5
6 Says Rob Gatto, senior VP-sales for Neustar, Some companies are already in their third version of a DMP and are still dissatisfied. The existence of data silos and the lack of time and expertise on the advertiser s side are two big reasons why DMPs fail. But perhaps the single biggest factor is that marketers don t take the holistic view and are making decisions inside the cone of digital. Industry executives say DMPs have fallen short of their promise because marketers have used DMPs tactically to increase the ROI of a digital campaign, for instance, but have been unable to deploy DMPs more broadly. Overall, they say they want a broader customer view than they are currently getting (Figure 5). MARKETERS DMP WISH LIST A look at what marketers want their DMPs to provide Figure 5 n I wish my current DMP would provide me with: n I hope that my future DMP will provide me with: 80% 70% 67.4% 60% 59.6% 61.7% 58.4% 58.9% 50% 51.4% 40% 30% 20% 10% 0% A complete view of my consumer so I can measure all my audience s activities in places like Facebook Accurate cross-device linkages to consistently and accurately identify consumers A better single view of the consumer across digital and offline experiences Base: 146 for those that have a DMP and 144 for those planning to have a DMP; based on 8-10 ratings on a scale where 1 is strongly disagree and 10 is strongly agree. 6
7 WHO RUNS YOUR DMP? A look at the internal owners of companies DMPs Figure % 25.2% 23.1% 18.6% 4.8% 9.0% VP-Director of Marketing VP-Director of Digital VP-Director of Analytics IT VP-CRM Other (CEO, CIO, CMO, CTO, Director of Media, etc.) Base: 290. I think the biggest issue driving that lack of satisfaction is that marketers don t step back to see the impact access to the data across the ecosystem could have on their business, says Michael Schoen, VP-marketing services for Neustar. Instead, he says, DMP decisions have been made in a digital vacuum, not looking at where customers are living and breathing which most often is still offline. The lack of a cross-channel perspective can be attributed largely to continued organizational issues. Although they recognize the marketing potential of breaking out of silos, for many brands relevant data and decision-making remain separate from each other. , website, CRM almost all of those numbers are still in silos, Mr. Gatto says. It makes [cross-channel decision-making] very challenging. Those who wonder why DMPs are not being used with big-picture marketing strategies in mind need only look at the disparate ways DMPs are managed. For instance, although 27.9% of respondents to the Ad Age-Neustar survey said the internal owner of their DMP was the VP or director of marketing, 25.2% said the owner was the head of digital; 23.1% said it was the head of analytics; and 18.6% named the head of IT (Figure 6). Not surprisingly, more than a third of survey respondents cited available internal resources and organizational structure issues among the top three challenges in implementing a DMP. 39.8% Available internal resources is a top challenge in implementing a DMP Ad Age-Neustar survey There is a big gap in skill sets out there in terms of what different brands do and how they approach data and marketing, says Chris Taylor, senior VP-marketing for Flowers.com. Some companies have entire teams for ad technology and digital analytics. It takes a lot of expertise to really exploit a lot of that stuff. It s not easy. Ad Age-Neustar survey 7
8 MAKING A DMP WORK FOR YOU Whether reevaluating a current DMP or considering making a new investment, marketers have a large number of expectations (Figure 7). From that perspective, they are asking how to make a DMP work better and more efficiently for their brands. Marketing, agency and ad tech experts offer this advice: Think big picture. Focus beyond digital from the beginning including when you are selecting a DMP vendor. CHOOSING THE RIGHT DMP What do you look for when selecting a data management platform? Figure 7 Reporting and analytics 80.7% User interface and ease of use 74.5% Market analysis and segmentation 70.7% Audience planning and analysis 69.4% Data ownership and security 67.9% Offline and online data collection 65.2% Cross-channel, cross-device measurement 59.7% Raw data access and portability 56.6% Attribution modeling 55.4% Third-party data integrations 54.5% Cross-channel audience syndication 52.4% Normalization and user profile management 51.4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Base: 290; based on 8-10 ratings on a scale where 1 is not important at all and 10 is extremely important. 8
9 SELECTING A DMP VENDOR Why do you choose some DMP vendors over others? Figure 8 Cost 60.7% Analysis of capabilities 58.3% Experience (qualifications/case studies, etc.) 50.7% Expertise (by sector/topic) 48.6% Recommendations from trusted sources 47.6% Past/current clients 25.9% Ability to fulfill new projects 25.2% Business model 24.5% 0% 10% 20% 30% 40% 50% 60% 70% Base: 290. Too many DMP decisions are being made without thinking beyond digital, partly because of the industry s current emphasis on programmatic buying. Maximizing the impact of a DMP requires thinking about customer journeys both offline and online. Failure rates on digital-only DMPs are very high, because companies find that after 12 to 18 months the DMP isn t providing the anticipated value, Neustar executives say. Says Mr. Schoen: If the actual selection process is only focused on digital media, no matter who you pick, you won t be satisfied because you will miss out on the bigger opportunity a DMP can offer. Know the right questions to ask a prospective DMP partner or vendor. Picking the right DMP vendor means knowing what you want from that partner (Figure 8). When choosing a partner or vendor, you need to ask the following questions: n How will the DMP allow you to connect your online information to your offline sales and data? n What do you expect the technology to offer you? n How does the vendor or system evaluate the effectiveness of marketing spending? n How will your proposed data partner or DMP vendor work with the ecosystem of your other agencies and technology partners? n Is having no data integration barriers an important consideration for your DMP requirements? n Is the solution a hybrid DMP/DSP that can only measure what it sells? 9
10 Overall, be clear clear about what your business goals and technical objectives are, and what demands the technology needs to support both now and into the future. Don t rely exclusively on your agency or vendor to understand the technology for you it s your brand. Says Mr. Schoen, Marketing and analytics need to expect that they have a better understanding of their business and their brand data than any vendor. They have to make that investment by building up a data science team or by buying that capability with a sophisticated partner. Agrees Mr. Gatto: Too often, brands are way too reliant on their agencies to deal with these important data issues. Make sure the DMP investment has interdepartmental support. For a successful DMP investment, it s critically important that it is not an initiative just owned by the digital folks, Mr. Schoen says. You need to have internal discussions about all the sources of data that you have access to, that might be in silos, and be open to thinking holistically about how the brand is engaging with consumers. Think about your retail data, all the touch points with consumers and the types of data you can collect. Retail is a $1.1 trillion industry; although most sales still happen offline, consulting firm Deloitte predicts that digital interactions would influence 64 cents of every dollar spent in stores by the end of 2015, or $2.2 trillion. Draw the lines to show how data from one channel can be activated in another channel. And, Mr. Schoen says, Have that preliminary discussion before the DMP initiative. Before buying, find an internal expert who really understands what a proposed DMP does and can do for your brand. Technology is complicated. Don t be satisfied with a DMP choice unless your team understands what it s buying. You may need to open up the black box for transparency and to really understand what the DMP does. Too many DMP disappointments have been caused because the marketer misunderstands what the vendor can do or more fundamentally, the vendor misunderstands what the marketer wants. That s a key reason why only 23.3% of survey respondents say they re using their DMP to its fullest capacity. For 23.3% We are using our DMP to its fullest capacity. Ad Age-Neustar survey the long run, encourage your company to create a higher-level data position with both technology expertise and the necessary big-picture perspective. More and more digital marketers need to think about their impact beyond the online realm into offline. Because of this, you want a DMP that can handle both offline and online activities so you can create that single portrait of your customers to help understand how they are interacting with your brand. Work toward an organizational position that helps handle data across departments and channels. In many marketing organizations, responsibilities including data collection, management and analysis are divided among traditional, digital and social media teams. But many leading companies are reevaluating how data needs are handled internally. For his part, Mr. Taylor of Flowers.com says brands need to develop higher-level, cross-departmental data scientists. To get the most of a DMP, you need someone on the team who understands digital marketing, the deeper technology and data analytics, he says. If you don t have that, you ll struggle to get the most out of your data. 10
11 Take it slowly. You don t need to do it all at once. Even after you invest in a DMP, remember that you don t need to make that big-picture vision happen all at once. Mr. Schoen suggests making the broad-based investment, but starting in one tactical area and ramping up from there. Be smart about how you approach the rollout. Start perhaps by being focused on improving something like your website experience a place where there are lots of inputs but one output. Then grow your data efforts from there. Finally, keep watching as DMPs and technology continue to evolve and be prepared to adjust to take advantage of what they can offer. DMPs are evolving to reflect the current technology as well as to address marketers growing need for cross-channel measurement and marketing across new channels such as mobile. Mobile has changed the game, Mr. Gatto says. Dealing with yet another customer device a mobile phone in addition to a desktop computer or tablet, and often multiple phones in a household has presented some headaches in terms of connecting consumer data across channels. But more significantly, he says, The emergence of the mobile device has given companies an opportunity to think about a real single identifier when trying to connect customers through the purchase cycle. The switch to mobile identifiers is moving DMPs into a new phase, Mr. Gatto says, where marketers will be able to connect data across not just digital and mobile, but also phone and television as well. The new generation of DMPs will be able to help make sense of the same user who interacts with a brand s content across a whole set of devices. That evolution is happening just in time. When asked what they wish their current DMP could provide, more than 60% of respondents to the Ad Age-Neustar survey said accurate cross-device linkages to consistently and accurately identify consumers. Similarly, when asked what they hoped a future DMP would provide, respondents top answer was a better single view of the consumer across digital and offline experiences. That s what Mr. Gatto calls the single persistent identifier key. [It] helps you tie all the data together whether you call it a DMP or not. 67.4% I hope that future DMPs will give me a better single view of the consumer across digital and offline experiences. Ad Age-Neustar survey To make the most of their data investments in today s marketing world, brands need a solution that helps determine the right spending on both traditional and digital media. That evolving solution will need to manage internal customer data across departments, merge it with the anonymous data of a DMP for optimal segmenting and targeting, and then apply the right attribution system to measure the results of those targeting efforts. Says Mr. Gatto, We are entering a whole new phase of where DMPs are going to go: to really leverage what a brand knows about its customers and how that can be used to provide content that makes sense, and ultimately translate that into prospects and customers. ABOUT THE SURVEY: The Advertising Age-Neustar online research survey was conducted in August 2015 by third-party research firm Advantage Business Research. The final survey findings are based on 290 respondents: 56.6% agencies and 43.4% marketers. The margin of error for the total of 290 respondents of the survey, at a 95% confidence level, is +/- 5.7 percentage points. 11
12 The Ad Age Content Strategy Studio, an extension of Advertising Age and adage.com, works with companies to help them tell their brand stories their way. Built on Ad Age s heritage of editorial expertise and excellence, the Content Strategy Studio works to develop the ideas that create an emotional connection with customers. Through articles, blogs, video, microsites, research, events, white papers and other opportunities, it provides end-to-end solutions for brands that will create the story that s fueling today s conversations. Storytelling for your brand by the brand that knows how to tell stories WHITE PAPER Writer: Julie Liesse Copy Editors: Nancy Dietz, Barbara Knoll Designer: Gregory Cohane Research: Eniko Skintej, Jeff Demarest Cover Art: Horoscope/Shutterstock CONTACT US Karen Egolf Editorial Director Content Strategy Studio kegolf@adage.com Becky Gibson Senior Account Executive bgibson@adage.com ABOUT NEUSTAR Neustar Inc. (NYSE: NSR) is the first real-time provider of cloud-based information services, enabling marketing and IT security professionals to promote and protect their businesses. With a commitment to privacy and neutrality, Neustar operates complex data registries and uses its expertise to deliver actionable, data-driven insights that help clients make high-value business decisions in real time, one customer interaction at a time. More information is available at Neustar Inc.
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