After The Krux Sale, Do Indie DMPs Still Have A Place?

pondNow that Salesforce has agreed to buy Krux for an estimated $700 million, which standalone data management platforms are left?

And is there still a market for independent DMPs, given the trend toward integrated marketing tech stacks and the high cost of maintaining data infrastructure?

To answer those questions, it’s important first to define terms, as the standard capabilities of a DMP have changed over time.

“The things we’re calling DMPs are not all the same,” said Martin Kihn, a research VP at Gartner. “There’s publisher-focused DMPs, the ad DMPs like BlueKai and the DMP-DSPs like MediaMath. Then there are vertical-specific DMPs like Adara for travel and managed ones like Conversant.”

That’s not all. Vendors with DMP-like functionality include early tag management firms (Ensighten), intent data managers (BlueConic), personalization providers (Lytics), digital experience managers (Qubit) and even attribution platforms (VisualIQ).

“What we’re seeing are two things – the dissolving of the DMP from its classic ad targeting role and its emergence at the center of the converged ad tech-mar tech hub,” Kihn said.

In the case of Adobe, the first marketing cloud to buy a DMP (via its 2011 acquisition of Demdex), data management is the common denominator for creating audience segments that carry across email, website, display media and search.

But not every marketer will want to buy a marketing cloud’s whole family of products. Many still prefer to cherry-pick – and pay – only for the functionality they need, so experts believe there’s still a market – and capital investment options – for standalone data management solutions. 

Who’s The Indie DMP Buyer?

“The key question for the remaining, independent DMPs is, ‘Can they establish a viable business model working with tier-two companies?’” said Susan Bidel, senior analyst at Forrester. “DMP technology is expensive to develop, and it’s costly to continuously innovate as they must in order to stay relevant.”

By tier-two company, Bidel is referring to a marketer’s size, business scope and breadth of assets; while an enterprise company may have revenue in the billions, a tier-two business might rest somewhere in the “hundreds of millions.”

Alex Rosen, managing director for IDG Ventures, which led a first-round investment in Krux in 2011, agreed that DMP selections come down to a client’s business needs and budget.

“One thing Krux did well was global frequency capping across all of your agencies, ad networks and DSPs,” Rosen said. For companies with activations across a multitude of touch points, the efficiency argument might make a large-scale DMP deployment more attractive.

“If you’re a flower shop,” however, “with a $1 million marketing budget, global frequency capping may not be as huge of an issue,” Rosen added. “Maybe you’re just buying some Facebook ads, experimenting with email and you only care about having a good tag manager so, when someone converts, your web page loads properly.”

But Michael Schoen, VP of marketing services for Neustar, said even some large marketers want standalone solutions.

“With DMPs, it’s a matter of whether marketers are comfortable with solutions that come in the box from their marketing cloud,” he said.

Neustar, of course, has its own DMP (by way of its 2013 acquisition of Aggregate Knowledge) bundled with multitouch attribution and analytics from MarketShare, but Schoen said it’s not unusual to pull off multicloud deployments.

“We often see clients of Neustar who are also clients of the big marketing clouds, so the question becomes, ‘How are they using our DMP with respect to Adobe site optimization or is there third-party data they’re pulling in through Oracle?’” Schoen said.

The Emerging DMP Use Case

One reason why it’s increasingly difficult to define a DMP (or “DMP-like capability”) is that the technology use case has changed.

The early promise of a DMP – to understand and target audiences, particularly through the use of cookies across the web – has evolved to include touch points such as TV, in-store, call centers and direct mail.

“If you’re just focused on frequency management across your buy, or getting a better understanding of how your Facebook media overlaps with your other media, those are all well and good pilot use cases, but you have to be thinking bigger in terms of ensuring clients are getting a consistent experience across channels,” Schoen said.

Indie DMPs are adapting to this reality. For instance, Lotame acquired its way into cross-device with its bid for AdMobius (and continues to invest in a TV capability).

Others, like Adform, MediaMath, Turn and Rocket Fuel, bundle data management capabilities as part of larger media activation businesses. MediaMath, for instance, has invested in identity management and a data co-op with an eye toward omnichannel.

Similarly, Ensighten, whose foundation is enterprise tag management, now sees itself as a customer data platform that unifies first-party (CRM and site-based) data with data from other digital touch points.

“We’re focused on the universal collection, stitching, ownership and activation of first-party data from all channels and devices, as well as the integration of offline sources,” said Josh Manion, CEO of Ensighten. “No one cloud can be everything to every marketer, so a vendor-agnostic data platform enables the broadest integration from all points. “

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