Evaluating the DMP investment with the help of use cases

We are all different. Companies can now connect with their customers as unique individuals by offering a relevant message at the right place and time. 1st party data is the main competitive factor today, what separates you from the competitors. This own data is a competitive advantage as it enables targeted advertising campaigns to be hugely more effective than campaigns in which only 3rd party data is used for targeting. In other words, own data helps to increase customer satisfaction and experience, as well as increasing the efficient allocation of marketing budgets.

Many businesses are utilising their online and offline data in separate channels, ignoring the potential of creating a comprehensive customer journey. Data management platforms (DMP) offer solutions that combine online and offline data into rich customer profiles used in targeting across multiple channels and devices.


Setting up business cases and objectives for a DMP pilot phase

When introducing new platforms and solutions, the investment needs to be justified. Usually, the main value drivers for a DMP initiative are cost savings and improvement in the overall customer experience. Cutting waste on advertising cost and improving the quality of the traffic are vital improvements from audience management. Better communication with customers usually increases the average value of purchases as well as purchase frequency.

The DMP investment can be rationalised with the help of business cases and objectives depending on the size of the company and the industry. The value of the DMP investment can be divided into short-term and long-term objectives.


Short-term goals

Short-term goals are important in proving the impact of investment in the early stages of adaptation of a new platform and processes. When setting short-term goals and building business cases around them, keep in mind that these business cases need to be easily  measured after a short period, and the metrics should be easy to define in order to be able to prove the value of DMP.

A quick win for a pilot phase could be the exclusion of the company’s own customers from customer acquisition campaigns or recent buyers from retargeting campaigns. This exclusion will lead to cost savings and more efficient use of the marketing investment. Even the easiest and low-complexity level use cases and objectives can have a big impact on business, as budget isn’t spent on wasted impressions and retargeting after purchase. It is important to notice that even though many advertisers are already using their own data in targeting digital campaigns, the data consists of mainly online behavioural data. DMP enables more precise targeting by combining online behavioural data with CRM data such as purchase history.

After you calculate the savings from such exclusions, it is easy to bring business cases down to the operative level as in optimisation of marketing communication. By optimising channels, media and content, the quality of traffic goes up while the costs go down. As a result, budget can be reallocated to the channels with high impact. At the same time, customer experience is improved by the comprehensive marketing communication that reacts to the customer’s actions and needs.


Long-term goals

As the use cases chosen for the pilot phase are usually low in complexity, the following use cases tend to be more complex. To illustrate, as you move forward with DMP implementation, you can combine different datasets such as online behavioural data and CRM data to more complex algorithms to be used in predictive models to target customers who are likely to upgrade their current product/service via cost efficient channels. With the success metrics chosen, the algorithm optimises towards the set goals, learns from success and improves the model. In this scenario, besides allowing integrated actions, the DMP’s algorithmic-based models can provide a faster go to market, a faster learning cycle and the possibility of adding more data points when needed.

To measure long-term objectives and impact of business cases, it is important to take a closer look at how the behavior of customers change due to new ways of serving more relevant advertisement, better ways of informing the customers in addition to providing better customer service. Business cases can be measured by comparing a control group to customers who have been impacted by this new way of utilising 1st party data and communication. The control group is a small, randomly chosen group of representative customers. Its members have not been exposed to the advertisement from the beginning of the DMP pilot. The comparison between the control group and other customers could be made quarterly, for example, to measure the impact of your marketing communication.


Final thoughts

The Data Management Platform is a key tool to take marketing communication to the next level and leverage the potential of 1st party data. It brings a new process to marketing communication planning as it starts from marketing insights and audience planning instead of briefing outside marketing and media agencies. As a consequence, new capabilities and new integrated ways of working dynamically will be needed along with the breaking of the internal silos.

Since DMP should concentrate most relevant information about your customer’s behaviour, it can go beyond media buying, affecting all areas of a company as product/service innovation and even the entire business operation. At the same time, much has been discussed on the General Data Protection Regulation (GDPR) in the EU about a data controller’s responsibility towards personal data. Extra attention needs to be paid to data manipulation and processing activities. In this scenario, a DMP solution can help businesses, not only with audience management, but also with GDPR compliance.

In short, with a single view of the customer, the DMP empowers marketers to deliver real personalised experiences across the customer journey, giving them additional value. At the end of the day, the investment decision for a DMP is not a matter of “if”, but a matter of “when” and “how” your business will be transformed by all this.

You can download the Avaus’ DMP use case worksheet here to see the most common use cases to start the journey to improve your customer’s experience!


Learn more from Avaus about DMP:

Understanding your customers journey with the help of DMP

Webinar: Audience management & DMPs

How to classify and enrich customer data for B2C marketing – Part 1

How to classify and enrich customer data for B2C marketing – Part 2

How to classify and enrich customer data for B2C marketing – Part 3

Data driven marketing is customer driven marketing

Data driven advertising

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