3 Reasons that DMP Purchases Will Trigger a Run on First Party Data

Now that Krux has sold to Salesforce, and DMPs have mostly been swept into the Clouds, the movement to bring more data management in-house at large brands is becoming more mature. Most of this is being done in the name of driving better customer experience via personalization.

With vendor data management capabilities now getting better and better, the companies that acquired DMPs will now turn to filling these platforms with new and better data that they own. The run on data management platforms will trigger a similar run on unique and first-party datasets. The logic behind why Salesforce would buy Twitter relied on this premise, though Twitter would represent an overpriced data buy given that the consumer growth at Twitter has slowed. Nonetheless, where there’s smoke there’s fire and unique datasets will once again be in demand. Why is this? Thanks for asking...

DMPs have all been purchased and the next battle will be fought on quality of data.

With the Salesforce purchase of Krux, DMPs have now been knighted: they are a must-buy for CMOs. Adobe and Oracle already knew this with Audience Manager and BlueKai but Salesforce makes it official. DMPs are the new CRMs for the B2C world. And what do we know about CRM systems? Garbage in, garbage out. For the last 15 years, a treasure-trove of companies have emerged to solve the problem of getting better data into CRM systems primarily through better sales rep involvement and seeding lead data (remember when Salesforce bought Jigsaw?).

DMPs don’t and won’t suffer from the lack of attention from Sales reps. But they will suffer from not being able to seed these platforms with their own differentiated cross-channel behavioral data, ever more important in helping analyze an increasingly complex customer journey. Owning this type of data will let companies combine what they know about their customers with what they don’t know to immediately recognize ROI from their DMP. Let’s remind ourselves that CRM as an industry is still plagued by the idea that it doesn’t really deliver ROI.

Oracle has already set off on the data purchase path. They made one of the first forays by the clouds into owning their own set of behavioral data by purchasing AddThis in January, a clear effort to bolster its own set of data and combine it with BlueKai’s more commoditized 3rd Party data marketplace. It’s clear that acquiring more proprietary sources of data for DMP differentiation is a race that has already begun.

Quality behavioral data is harder to come by because of mobile and ad-blocking.

While the demand for owning first party data will increase, the supply of independent sources large enough to matter will dwindle. Mobile and ad blocking have seen to that. For sake of simplicity, let’s keep our conversation of data in this article to just three types:

1. Cookies
2. Mobile IDs (IDFA and UDID)
3. Login Data

There is no apparent shortage of cookies in the world but the rule of thumb is that cookies do get stale, meaning that keeping up monthly cookie collection is a real chore. This also means that you have to keep consumers interested enough that they keep coming back. And Ad blocking is a real threat to this ongoing monthly collection, especially when the most coveted demographics like millennials are the most likely audience to install ad blockers.

More importantly, ad blockers commonly block third parties who collect their data through Javascript tags on pages. While those tags have been bloating web pages around the world for years, they do serve purposes like analytics. Now, companies like Nielsen and Comscore who have been building cookie-based datasets for years under the guise of analytics are under fire. Nielsen and Comcast still provide some of the most common third-party datasets out there for advertising purposes. As those datasets dwindle, will the DMPs be able to provide their own data in their stead?

The increasingly mobile-based world exacerbates the difficulty of collecting new data. User attention is fragmented on mobile devices, with apps taking the lion’s share of time. Mobile browsers treat cookies differently than browsers on laptops and desktops and Safari, which has 55% of the mobile browser market tends to block third-party cookies altogether.

While third-party cookie data is on the decline (how many datasets out there have more than 200 million cookies month anymore?), there is a temptation to believe that this will simply be replaced by mobile IDs such as IDFA (iOS) and UDID (Android). And this might be partially true - both IDs are more lasting than cookies. However, both Apple and Google have been cracking down on the info that one can obtain from these IDs. In the past, you could scrape behavioral info like other apps that a customer used. So, for example, I could tell if a user may be health-conscious. Today, not so much.

Moreover, cross-device targeting (targeting one user across multiple devices - the average person uses 2.7 devices) is slow to arrive because of faulty data and lexicon. Even companies with really large sets of mobile IDs not named Facebook - think large consumer apps and mobile analytics companies - have had a hard time turning toward mobile targeting because the money isn’t quite there. That leads us to...

Login Data is for the few.

The future, according to Facebook and Google, is login data, data that companies can definitely tie to a user and their behaviors and devices. (Think about when you have your logged-in Gmail open all the time in your Chrome browser!) This allows large-scale collectors of login data access to everything from email addresses and cell numbers, to behavioral and survey information. Login data promises to be the hallmark of richness, accuracy, and persistence. In other words, everything that cookies are not.

It’s tempting to think that there will be a run on login data since it has all of this promise to be so much more. After all, it’s the best data, right? Well, that is the reason that Twitter has been tied to Salesforce, as I mentioned above. Twitter has 200 million logged-in monthly MAUs replete with .

But admitting that login data is better is not something that the Clouds need to do, want to do, or should do. Login data isn’t proven to be better. Facebook and Google, for the most part, take advantage of tremendous scale instead of just better targeting data. And this is the rub.

If the Clouds drive toward getting more login data, they are really just admitting that Google and Facebook have the best advertising data in the world. The Clouds can’t play that game. There are only so many companies with over a billion logged in users out there. Like maybe 6. The core rule of strategy is to not play a game with someone else’s rules, which means the Clouds are better to reposition toward their strengths and look at unique sources of cookie and mobile data.

In the coming world, DMPs will be a fantastic addition for large brands to manage their own data and build new capabilities in-house. Now it’s time for DMPs to help spur that transformation by providing their own data to help differentiate themselves. The key will be to stay away from doing so in a way that clearly gives Facebook and Google the upper hand.