Data drives the modern economy. The right type, amount, and quality of data lets organizations better understand their customers. This understanding enables companies to build more accurate customer profiles, design personalized marketing programs, refine retention strategies, and nurture meaningful long-term customer relationships.
Simply collecting this data, however, is not enough. Data only becomes valuable when it is transformed into insightful information. This means a business must put structure and context around all that raw, unorganized data.
To achieve this transformation, businesses need to be proficient at data management. Moreover, all that customer data must obey relevant data privacy laws – of which there are many. This is where a compliance-oriented data management platform (DMP) can help.
What Is a Data Management Platform?
A Data Management Platform (DMP) is a centralized system that collects, organizes, and manages large sets of data from various sources and then makes it available to other platforms, like Demand-Side Platforms (DSPs), Supply-Side Platforms (SSPs), and other advertising and marketing technologies. Essentially, a DMP is used to unify and make sense of vast amounts of data to provide actionable insights and to assist with personalized targeting.
The DMP enables organizations to aggregate, organize, analyze, optimize, and manage customer data. Companies can also put this valuable data to use by capturing audience insights and converting those insights into potentially profitable actions. A DMP plays an important role in data-driven marketing campaigns, digital marketing programs, and digital advertising.
Investing in the right DMP allows businesses to:
- Gain deeper insights into customer behaviors
- Build accurate and detailed customer profiles
- Improve segmentation and targeting
- Customize content based on factors such as demographic data or customer purchase history
- Deliver personalized customer experiences throughout the customer journey
The Need for a Data Management Platform
Organizations collect customer data to improve their marketing strategies and advertising campaigns. This data could be first-, second-, or third-party. First-party data is collected directly from data subjects (that is, customers or would-be customers) through the organization’s website or social media page, mobile app, or other IT systems.
Second-party data is acquired from other companies based on a mutually beneficial information-sharing relationship; Company A provides some data to Company B, and vice-versa. Third-party data comes from third-party websites, social media platforms, or data marketplaces.
As firms collect more and more customer data, they struggle to manage it, turn it into insights, and drive desirable outcomes such as more sales. With the vast quantities of data that businesses use today, handling any of this via manual processes is impossible. The easiest and most cost-effective way to sort, analyze, and use customer data is with a DMP.
What Does a Data Management Platform Do?
A DMP collects and organizes unstructured audience data from multiple first-, second-, and third-party data sources (both online and offline) to build detailed customer profiles. Demand-side platforms (DSPs), supply-side platforms (SSPs), and ad exchanges can use these profiles for various purposes, including targeted advertising, personalization, and content customization.
The DMP organizes the data into audience segments that help marketers and advertisers build anonymized customer profiles and determine what content those people engage with. That paves the way to develop data-driven strategies to reach these customers more effectively with personalized interactions, customized content, and targeted ads.
Some DMPs are integrated with DSPs. Others integrate with customer relationship management (CRM) systems or incorporate machine learning and artificial intelligence for more advanced data processing capabilities.
Here are the primary functions and benefits of a DMP:
- Data Collection and Integration: DMPs collect data from various sources, including first-party data (from the company’s owned sources like websites, mobile apps, CRM systems), second-party data (data purchased or shared from another company), and third-party data (data bought from external sources that aggregate data from various places).
- Data Segmentation: Once the data is collected, DMPs segment it into different groups based on various criteria like user behavior, demographics, interests, etc.
- Data Analysis: DMPs provide tools and analytics capabilities to gain insights from the collected data. These insights can be used to improve marketing strategies, discover new audience segments, and optimize advertising campaigns.
- Targeting and Personalization: DMPs help advertisers target specific audience segments with personalized content and ads. This improves the relevancy of the ads for the users, potentially leading to higher conversion rates.
- Data Activation: The collected and processed data can be used to inform other platforms (like DSPs) for programmatic ad buying, retargeting, and other advertising tactics.
- Privacy and Data Protection: With increasing concerns about user privacy, DMPs have tools and features to ensure that data collection and utilization comply with various regulations like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).
- Data Storage and Management: DMPs provide a centralized repository for storing and managing data. This ensures data consistency, quality, and accessibility.
- Integration with other platforms: DMPs are typically designed to integrate seamlessly with other advertising and marketing platforms, allowing for a more holistic view of the advertising ecosystem and facilitating data-driven decisions across various channels.
The Benefits of a Compliance-Focused Data Management Platform
Compliance-focused data management enables marketers and advertisers to collect, enrich, and use audience data in a privacy-compliant way. They can create a comprehensive data ecosystem, refine their marketing strategy, and achieve omnichannel marketing goals – all without running afoul of privacy regulations.
Data privacy regulations such as HIPAA, the General Data Protection Regulation, and PCI DSS are strict about protecting consumer data. Under these rules, organizations must implement appropriate safeguards to prevent data breaches. The organizations must also take reasonable measures to collect and use their data ethically, legally, and with the full consent of the data subjects.
The penalties for non-compliance can be steep, so meeting these standards is crucial for any company that collects consumer data. That’s why a compliance-focused DMP is so important; implementing a DMP with built-in compliance controls can bring the following benefits to companies collecting target audience data.
The DMP organizes collected data to build anonymized user profiles. This anonymization is important because it protects the privacy of data subjects. The platform sanitizes and masks the data so marketers cannot see customers’ personal information such as names or addresses. Marketers can still use the anonymized data, however, to create customer segments, deliver personalized content, and serve more targeted ads.
DMPs with compliance features allow enterprise users to define what data should be classified as personal information. Marketers can also discover where the data resides, who uses it, and how those people use it, all of which provide greater control over data and curtail non-compliant behaviors.
Stronger data governance
Advanced compliance based DMPs integrate backup, recovery, and archiving to create a searchable pool of structured and unstructured audience data. This allows organizations to identify personal data and automatically comply with data and privacy policies, which simplifies data governance and compliance.
Manage customer identities
Compliance-oriented DMPs provide a strong foundation for privacy-compliant identity, data, and records management. They manage data across multiple IDs, devices, and channels. In addition, with built-in identity resolution, they connect unknown IDs with real people, allowing marketers to deliver more relevant messaging to each consumer.
Data masking and encryption
The best compliant-focused DMPs allow organizations to access, identify, define, govern, and erase data to ensure compliance. Through role-based data masking and encryption, they can protect sensitive information. They can also audit data to maintain the confidentiality of personal data and prevent breaches, which consequently keeps your risk of regulatory enforcement low.
Maintain Data Privacy Compliance with ZenGRC
In today’s digital era, safeguarding data privacy is not just a best practice but a mandate, with stringent regulations like GDPR, CCPA, and countless others being enforced globally. ZenGRC provides a comprehensive solution tailored to address these complexities, ensuring that organizations remain compliant with ever-evolving data protection laws. Its intuitive platform centralizes policy management, streamlines the audit process, and offers real-time monitoring of data-handling practices. By implementing ZenGRC, businesses can not only reduce the risk of non-compliance penalties but also foster trust among their clientele, showcasing a genuine commitment to data protection and privacy.