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Data Management Platform

What is a Data Management Platform (DMP)?

A Data Management Platform (DMP) is a single unified platform to collect, organize, and activate first, second, and third-party data about users or customers of a business from various online and offline sources.

It is part of the programmatic advertising ecosystem. A DMP sorts and refines raw or unstructured data to make it understandable and usable. Additionally, it uses this data to create comprehensive user profiles that are used to generate more targeted advertisements and achieve personalization and customization.

DMPs and data types

Data management platforms deal with all types of data:

  • First-party: It is the user data that businesses collect by themselves from the website, app, social media, CRM, surveys, and subscriptions.
  • Second-party: It is another company’s first-party data. Companies that have a mutually beneficial relationship share data with each other.
  • Third-party: It is collected from outside websites, apps, and other platforms that are not directly related to a business. This type of data is even sold on data marketplaces.

How does a DMP work?

Below are some functions that a DMP performs while tracking user data.

  • A DMP categorizes user profiles. For example, users who visit a sports website could be categorized as ‘sports enthusiasts’.
  • The DMP contains a tracking code that helps in capturing user information.
  • Whenever a user visits a website, the DMP captures user information with the help of the tracking code.
  • The DMP tags a user’s desktop and mobile activities to get a better understanding of the user's online behavior.
  • The DMP creates a structured form of the data collected. It creates anonymized user profiles and shares them with digital advertising platforms to help in ad targeting.

Related Terms

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