Brands forming technology partnerships should ensure there is no room for vendors to make incorrect assumptions about their needs, writes Rebecca Muir, head of research and analysis at ExchangeWire.

There is nothing quite like being at the frontline of digital research. Not only does my role allow me to watch the evolution of the ecosystem as it happens, it also provides the opportunity for truly honest conversations with the brands, media agencies and publishers trying to keep on top of each new development.

Lately, focus has fallen on the world of data management platforms (DMPs) — how advanced adoption is across Europe, what they are used for, and the return on investment they offer.

According to recent ExchangeWire research, in association with Weborama, over 60% of respondents — including ad networks, brands, media agencies, publishers and trading desks — have had a DMP for over a year. But that is not the picture painted by my frank discussions with brands: most do not have a DMP and have no understanding of the benefits implementation would provide, which leads to confusion when tech vendors tell them they need a DMP.

Digging into the data, a story emerged: almost half (43%) of brands have actually had their DMP in place for more than two years. These brands can be considered ‘early adopters’ and were a much larger group than expected. After brands’ early adoption phase there was a yearlong lull in uptake of DMP technology that has been superseded by a second wave of implementation over the last 12 months.

Early adopters

So, who were these early adopters and where have they been hiding? They are likely to be large financial services organisations, travel agents, consumer product manufacturers, telcos, broadcasters, and consumer service organisations. What these businesses all have in common is that they have enormous reach across the general population. This means they also have significantly larger quantities of data than, for example, a fashion retailer, who caters for a niche segment.

“These early adopters shaped the development of DMP functionality”

It therefore stands to reason that such companies were the early DMP adopters; firstly, because of the existence and the need to process large data sets (CRM data, media campaign performance reports), which makes them more data-savvy than others. Secondly, they are more likely to be big ad spenders — and the more you spend, the more you have to gain by improving efficiency. DMP vendors will also have targeted these organisations first during their initial sales efforts, due to their relatively deep pockets and data-driven nature.

These early adopters shaped the development of DMP functionality, they provided the first case studies, established protocols for data integration, and are still at the helm, challenging vendors to innovate. Over time they developed their understanding of the benefits, and capabilities, offered by their DMP and used that knowledge to help them realise its full potential. No wonder 90% of current, long-term users say they are satisfied with their DMP.

Hiatus in uptake

What then, led to the hiatus in uptake of DMPs amongst brands 12 to 24 months ago? After seeing the journey of the pioneers, there is no doubt in my mind that other advertisers explored the idea of implementing a DMP but were unable to do so until recently due to a variety of factors.

Ingestion of first party web navigation and CRM data is the first phase of DMP operation. If an advertiser is not in a position where they are able to supply this data to a DMP in a suitable format, then they are not ready to implement a DMP and getting to this point may involve overcoming several hurdles.

One challenge is that the data might be owned by one team but require another to handle the export, transformation, and loading of that data. If these teams have not worked together before initiating a relationship, communicating requirements, and establishing a functional system of working can be problematic. Then there might be any number of technical difficulties in the actual transfer of the data.

What’s more, the research backs this up: the factors cited as the biggest barriers to implementation were disparate data sets (48%), siloed teams (46%) and lack of in-house skills (41%).

And so, the lull we observed shows a level of maturity within the advertiser community, not, as is often assumed, that brands ‘lag behind’ when it comes to technology adoption.

Business objectives

Ad tech vendors are sometimes guilty of not understanding advertisers’ business objectives, and when this happens, friction occurs. For example, before investing in a DMP an advertiser needs to have accurate on-site tracking and CRM data. If brands do not communicate their needs and the ad tech vendor goes ahead with installing their solution as a ‘one-size-fits-all’ model, there is a real risk that the system will not be aligned with or able to meet business priorities and will therefore be ineffective.

“When looking to form partnerships, brands need to ensure there is no room for vendors to make assumptions”

What we can learn from this story is that no one knows business requirements better than those who are responsible for setting them. When looking to form partnerships, brands need to ensure there is no room for vendors to make assumptions about their needs by clearly stating what their prospects and expectations are to promote better understanding — taking the long-view to get more out of the DMP at the start, so that they can begin to use it more effectively at an earlier stage and build trusted, valuable partnerships with vendors.