• by Marc Gluck , Op-Ed Contributor, February 10, 2016

One consequence of the rise of programmatic is that it’s now a prerequisite for every firm in the Lumascape to offer an audience solution. But that audience solution could be as simple as access to a third-party data provider, or a tool for integrating first-party data. So how do you tell the difference between a DSP with some light audience capabilities, and a DMP with a robust audience solution?

In truth, the answer has more to do with the user than the tool. Yes, it’s absolutely true that capabilities vary across ad tech’s alphabet soup of vendors, but whether you engage a true DMP, or hire a vendor with limited DMP capabilities depends largely on whether your focus is strategic or tactical.

First-party data

When we talk about first-party data in a tactical context, the discussion often revolves around adding pixels and retargeting based on site visits. This is the bread and butter of programmatic, but it’s important to realize that the insights, while rich with data, are focused on the bottom of the funnel. Whatever you’ve done to define, identify, and locate your audience has already occurred. Retargeting with first-party data is the final step in that process; it is the knockout punch, the opportunity to deploy everything you know about your customers to move them through the final section of the funnel.

Given the power and importance of first-party data, it’s not surprising that we’ve seen billions of dollars invested in technology designed to exploit that opportunity. But as brands take control of their data, they need to understand the value of using first-party data in a strategic context.

The question isn’t how you use data to increase your conversion rate (or whatever metric you use to identify the end of the buyer’s journey). Instead, thinking strategically about audience means taking the widest possible view. Your audience strategy needs to reflect first-party data from all channels, including social, mobile, and offline. If you’re talking to a vendor about bringing the full spectrum of data to bear, you’re thinking strategically.

Third-party data

Shopping for third-party data is a lot like visiting a grocery store. No matter what, you’ll leave with food, but you have a choice: prepackaged meals, or raw ingredients.

When you shop for prepackaged data sets, you’re thinking tactically. Much like a shopper trying to grab a quick dinner, you’re trying to solve an immediate problem. The choices are abundant, but they all have one thing in common: None of them were created with your particular needs in mind. A third-party data set, like a frozen meal, is a plug-and-play solution.

If you want to think strategically about using third-party data, it makes more sense to think in terms of ingredients. While you’re working with the same data brokers and vendors, the difference is that a strategic approach means focusing on the desired audience first and the data necessary for acquiring that audience second. Instead of buying prepackaged segments that everyone uses, you’re asking your vendors to deliver something much more specific: a unique slice of third-party data that speaks to your audience, and your audience alone.

New business

Tactics are how you implement strategy, especially when it comes to addressing new business. If you’re thinking about your vendors in a tactical sense, you’re reacting to the immediate challenges and opportunities of the moment. Obviously, that’s very important. But there’s a larger question that has nothing to do with tactics, and that question speaks to something all marketers need to ask: What's next?

Ultimately, organizations that use data to its maximum strategic effect won’t just benefit from better audience insights, they’ll enjoy true business insights that tell them where their audiences wants them to be in the future, and what that audience wants them to offer.