Data Management Platforms (DMP): What B2B Enterprise Marketers Need to Know
In a world where data plays a vital role in practically every business decision-making process, no wonder we are witnessing rising interest among B2B marketers in Data Management Platforms (DMP). A DMP is a software designed to sort out unharmonized data from multiple sources to build well-specified audience segments for marketing (primarily, advertising) purposes. Almost every notable vendor has a Data Management System like Salesforce DMP or Adobe AudienceManager in place. They have been indispensable tools to B2C advertisers for a long time, but the question arose recently whether they are useful for B2B organizations as well. What would be the cases in which their use would produce the biggest possible benefit?
First, we must understand that DMPs rely heavily on data and the sources of acquiring this data. Let’s say your business has thousands of valuable leads or contacts out there that you want to push into a Data Management Platform. Can you get data from these contacts when they visit your website? It can be complex because of GDPR and privacy regulations in the US and other countries you cannot collect and process data without clear consent from an end user. You need cookies to be able to match your website visitors and contacts, but cookies are not stable. Moreover, many DMP vendors (like Salesforce) don’t provide cookies. This seriously limits the sources for obtaining first- and second-party data by marketers. Therefore, to be able to make use of a DMP, you need to talk about real big volumes – tens of thousands of cookies, contacts, and target accounts.
Ideal DMP use case: small deals, simple buying process
Where the deal sizes are small and volumes of data units are high, DMP becomes a very powerful tool. Let’s separate the B2B area into two distinctive categories: 1) businesses with a small average deal size and a simple, straightforward buying process and 2) companies that operate large enterprise deals (over $100k) with long and tangled sales cycles. When your offering is related to the first category, with maximum tens of thousands (mostly, thousands) in deal sizes or you are an e-commerce business, then DMP might be a perfect solution for you. In this type of business, advertising is the fundamental marketing channel and the primary question is how to target the audience properly? You may have millions of people from different locations in your target group, but if you are thinking in terms of efficiency, you want to advertise to only those people who are interested in buying from you. Unique insights like purchase intent data (what kind of people are in the market for certain types of products) along with the qualification and segmenting provided by DMP prove to be very efficient in these cases. All of a sudden, your multi-million target audience can shrink to a couple of thousand people. Additionally, you can use retargeting to only show advertising to people who have recently visited your website. Tools like Salesforce Advertising Studio can give you the possibility of aggregating different targeting methods across different platforms. You can use Google targeting, Keyword targeting and make sure you only get to the people who are really interested in your product or service. To e-commerce and inexpensive deals businesses such instruments could save vast amounts of advertising money.
Why DMP doesn’t work for enterprise business
But on the enterprise level, when average deal sizes surpass $100k and buying cycles are normally longer than 6 months, all these tools and methods no longer make sense. Imagine that you are a large turbine manufacturer. Your buying process can take up to 3 years and involve as many as 50 people in the decision-making process while contract values reach $20 million. Purchase intents or other DMP data won’t be helpful here. Even if you know that someone is in the market for your product, the chances are that they already halfway agreed with another vendor, and it is too late to start advertising to this company. Retargeting may still be a good solution but, firstly, you don’t need to have a DMP for this purpose, and secondly, Facebook or LinkedIn targeting is not very useful in B2B.
On the contrary, Account-Based Advertising will be a good solution here since it enables you to target companies from your CRM system. If you are an enterprise vendor, it’s likely that you already know the companies you want to sell to. A common situation for the B2B enterprise business is when a small number of accounts compose a substantial share of the revenue (the classical “20/80 rule”). Then it’s a no-brainer where you should put your advertising money – the only big challenge is getting your ads in front of your most probable buyers and optimizing them towards revenue. DMPs, as they depend on 3rd party supply of IP addresses and cookies) are not designed for account-based targeting.
To decide whether it is worthwhile to invest in a Data Management Platform companies need to understand their existing business cases. No need to remind that such tools are very expensive, so you need to make sure a high rate of returns is expected. While in small-deals or e-commerce areas DMP is poised to become an increasingly powerful tool and a cost-saver, its utility is very limited or almost non-existent for large and complex B2B sales. It’s crucial to realize that these two cases are very different, and tools, methods, and best practices of e-commerce audience targeting cannot be applied in the enterprise cases and vice versa.