Last year’s mobile data traffic was nearly 30 times the size of the entire global Internet in 2000. Research from Cisco found that global mobile data traffic grew 69 percent in 2014 and will increase nearly tenfold between 2014 and 2019.
There are countless more impressive statistics about the growth of mobile data, but they all speak to one, fundamental point — mobile devices are rapidly eclipsing online as the primary tool for digital consumption. And with the growth of mobile data comes the need for data management platforms (DMPs) that can handle that data, and leverage it into something useful for advertisers.
Traditional DMPs are not enough
As Digiday’s Jack Marshall puts it, a DMP is “a piece of software that sucks up, sorts, and houses information, and spits it out in a way that’s useful for marketers, publishers, and other businesses.” DMPs import and manage data from a variety of sources, such as cookies or customer IDs, and use that to create audience segments. Advertisers use these segments to target specific users with the right message on the right channel and/or device.
DMPs are a critical part of ad-tech today because they enable advertisers to better understand customer information and wield that information more effectively to drive results. And so along with the rise in mobile devices has also risen the need to track and manage mobile data. Mobile usage now exceeds PC Internet usage and consumers spend 162+ minutes on their mobile device per day.
As a result, spending on mobile advertising is exploding. eMarketer estimates that mobile ad spend will top $100 billion worldwide in 2016. Despite this, it remains a fragmented and underserved market. Mobile ads have struggled to live up to their potential.
One of the biggest challenges is ineffective ad targeting. Having an impact on mobile requires operating in an environment without cookies to deliver smart, intimately relevant messages that break through all the noise. It requires processing of different signals to uncover a true understanding of each user, and what they want to see. For that, you need mobile data. This allows brands to create meaningful interactions with their users at exactly the right moment — when they are out living their lives.
However, delivering accurate, audience‐targeted advertising to mobile users remains a real challenge in the industry, since existing DMPs and Demand‐Side Platforms (DSPs) are currently designed to leverage data from the online world, and rely on cookies. If an enterprise wants to optimize its advertising in the mobile world, it must integrate with many different data sources and vendors. Moreover, traditional DMPs provide a limited view of user data because they don’t emphasize information from the “real world,” which is arguably more important than the information that comes filtered through a desktop. Brands could be missing as much as half of the customer data they need.
The key to accurately connecting with consumers in today’s mobile world lies in location data, but this can be hard to manage and understand at scale. Creating authentic audience segments requires a better understanding of a variety of user attributes, including past behavior, intended behavior, and actions and interactions in the real world, such as app and mobile web usage. It also requires a detailed and accurate understanding of the physical world. Whether it’s as a pure play solution or an additive component to existing DMPs, mobile DMPs are gaining momentum and will play a critical role in the future of ad-tech.
The power of mobile DMPs is in processing location
Mobile DMPs enable advertisers to unlock the value of mobile audiences. They collect data from multiple sources, including where consumers are, what they are doing on their devices, and when they are there. These data points are powerful signals that enable advertisers to create a 360-degree view of their customers, as well as an accurate model of what those customers are doing in the real world.
There are two types of mobile data that are fundamentally different from online, and provide both unique insights and challenges not present in online DSPs. The first is Point of Interest (POI) data — the actual location of where things are in the physical world — businesses, restaurants, parks, etc. As we pass by the same places every day, we take for granted how hard it is to accurately locate places correctly via the digital world. We all have had the experience of searching for a place we know exists and not finding it online, or worse still, having it show up as a pin on a map somewhere different from where it is actually located. There is also the problem of multiple references to a single place — 1 Bryant Park, 1111 Avenue of the Americas, and the BofA building in NY all refer to the same location.
In our experience, 20-40 percent of any data set about places is wrong — and when working on mobile, if POI data is wrong, insights about mobile consumers are meaningless, and you risk sending people via their mobile devices to places that do not exist in the physical world.
The second mobile data type is user location data — anonymously tracking where mobile users are in the physical world over a period of time. This data also presents a myriad of challenges, from inaccurate latitude/longitude data injected by mobile publishers, to differing levels of granularity (e.g. cell towers versus GPS), and a host of privacy issues. Managed effectively though, this data reveals volumes about consumer interest and intent. As with POI data, if you can’t do this accurately for hundreds of millions of subscribers, all the insights about your user’s mobile behavior are incorrect.
By combining this data, you can see how mobile DMPs make it possible to anonymously identify users across multiple devices in the physical world. Once users are found across different devices, common associating data points and attributes are combined to create user personas, which provide brands with greater insight into user behavior and cross-device interaction. These personas are then broken into different audience segments that can be used to carry out targeted, multi-screen advertising.
This trend towards mobile DMPs has deep implications for the ad-tech space. To start, this technology empowers brands to fully capitalize on the potential of mobile devices. They can gain invaluable insights into who their customers are, what they are doing, and the kinds of messaging they respond to. In the same way that online DMPs improved the accuracy of targeting online, mobile DMPs are bringing mobile advertising into a new era where ads actually generate measurable ROI.
In addition, mobile DMPs will help with the attribution problem, which remains a major headache for marketers. Advertisers will have actual, measurable data on consumer behavior — such as whether they visited a store post-exposure to an ad — and how their campaigns are performing across platforms and devices.
Mobile is rapidly cementing its position as the dominant computing platform. People live their lives through their smartphones and thus mobile is where the most important, valuable data is created. In order to avoid becoming completely obsolete, advertisers need to get significantly better at understanding their customers across various touch points, away from the desktop. From there, they need to leverage that data into deploying effective ad campaigns.
Mobile DMPs are making this possible, and their emergence represents a watershed moment in digital advertising — one where advertisers are finally able to catch up with consumers on mobile.