Forrester Analyst O’Connell Reviews DMPs, Sees Company Culture As Roadblock For Implementation

Forrester analyst Joanna O’Connell leads the charge – along with fellow analyst Michael Greene and others – in a report on data management platforms (DMPs). Her findings look at a number of companies providing DMP services in the data-driven advertising space. Among O’Connell’s observations on DMP integrations, “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.” Read a bit more about the report here.

O’Connell discussed the report’s findings and some additional observations with AdExchanger.com.

AdExchanger.com: For marketers, what do you see as the leading use case for a DMP today in digital?

JO: Interactive marketers have so much audience data at their disposal – from their site-side data to their offline (like CRM) data, to their media data. Imagine being able to 1) create a single view of a user and 2) use all those data assets to make smarter decisions about how to talk to each user you encounter through your digital media initiatives, your site-side messaging, etc. That’s what I think makes the DMP powerful – bringing data intelligence to every digital interaction a marketer has with users. Big brands (or companies with many sub-brands) like CPGs could do so much more with their own data than I think most do – a DMP can help. Some folks also like DMPs for their data collection and aggregation capabilities – sparing employees the time and energy necessary to do it in more traditional, manual ways – provides value.

Among internal groups that must implement or engage with a DMP – such as marketing, IT, legal, and customer relationship management (CRM) or analytics departments – where is the biggest roadblock?

I am speculating a bit here because this stuff is still really new, but I would imagine that for certain clients the process is smoother than for others, and the biggest factor affecting the success and speed of the process is likely company culture – if it’s a company where employees are encouraged to collaborate across departments to achieve a common goal (obvious example: improving company performance) they are likely to have an easier time getting the key constituencies to work together. But not all companies have that kind of culture.. I also think that having a clear vision as to what role the DMP can play and what value it can deliver in meeting either short or long term business objectives can also push the process forward because it creates an explainable, defensible argument that folks can understand and grab onto. The best thing an interactive marketer interested in using a DMP can do is loop the relevant players in as early as possible – they shouldn’t underestimate how long it may take for Legal to clear everything, for IT to get on board, etc.

What’s your take on the role of the agency with the marketer’s DMP?

I spoke to several agency folks who had jumped on the DMP concept like white on rice (folks I would describe as progressive, data-savvy thinkers). Agencies are always looking for innovative solutions for their clients (that’s a key value that agencies provide), and the DMP is a really innovative idea – creating a universal digital view of the user; creating, customizing and managing external and proprietary segmentation in a centralized way; surfacing new audience insights – all great stuff. In the short term, the agency folks bringing DMPs to their clients are pushing their clients’ strategic thinking, which is fantastic. But in the long term, I think some clients may be better served in having direct DMP relationships. We’re talking about a tool that can help with audience intelligence, segmentation and management across digital channels. What if the agency managing the DMP only manages Display advertising? Does that limit the scope of the DMP? It could. But to be clear, just as is the case with any other self-serve tool (like a DSP) we’re not talking about a ‘set it and forget it’ solution – to make most effective use of the tool, the right skills, staff and support have to be in place, whether that’s inside the agency or client org.

What can you say about the porting of offline data to online? Is it happening? Why or why not?

It’s on the rise. It’s still a fairly onerous, time-consuming endeavor but I think more and more interactive marketers are seeing the potential value of such an exercise and going for it. That said, I think it’s important that they do it with their eyes open – if they’re expecting that porting their 1st party offline segmentation online will take their digital performance from a 0 to a 100 they may be disappointed – it’s about adding yet another valuable tool to the toolbox and continuously making incremental gains to the efficiency and sophistication of their digital marketing.

What should publishers keep in mind about the marketer’s DMP strategy?

I’d say that publishers need to be mindful of the reality that marketers are becoming more and more savvy about how they target and speak to users, and that “audience targeting” isn’t going away. The more publishers empower themselves to provide the right solutions to clients, the more value clients will see in those relationships (which my colleague Michael Greene had addressed pretty extensively in his research of late). But of course, there’s always going to be the push/pull that exists between the buy and sell sides. That’s the nature of the game – if marketers have proprietary data intelligence at their disposal, they are going to use it.

Any sense of “ballpark” costs for DMPs and the costs associated with effecting a long term data strategy?

No. I’d love to say that I do, but when I was speaking to vendors for this doc, I didn’t really get much info in terms of cost expectations. I will say this – I don’t think it’s necessarily “cheap” – but if clients treat it as a necessary tech investment that helps them realize the bigger strategic vision of right message to right user at right time, I expect the savvy ones will consider it worthwhile.

By John Ebbert