• by David Dowhan , January 29, 2016

There are fault lines in the lumascape creating a searing divide between data providers, data management platforms (DMPs) and demand-side platforms (DSPs). Data providers have the data and insights, DMPs organize them and DSPs make them actionable. And they all contribute to the same goal: targeted, data-driven marketing across every channel and device. Yet they remain separate, and often even at odds.

All this separation won’t last for long, though, because as the marketplace is structured now, it doesn’t best serve marketers. In the move toward data-driven cross-device targeting and marketing, marketers are pushing for a more seamless link between data, its application and its activation. That calls for a consolidation in the lumascape.

The lines between DSP, DMP and data providers will further blur, resulting in a deeper integration of respective services to better help marketers find the right consumers on the right devices. The only question is whether it happens through acquisition, or by way of innovation and strategic partnerships.

Why Divisions Between DMPs, DSPs and Data Providers Persist

Despite the fact that DSPs are not a one-stop data shop, they still make the bold sell that they can provide an advertiser with any data and combination thereof in a cohesive fashion. However, the reality is that there are limits to that claim.

Although marketers may demand deeper integration, the process of integrating third-party and first-party data is complex and labor intensive for DSPs, DMPs and the data providers themselves. Innovation and partnerships can only get us so far.

There’s a point at which the cost of integrating additional data sources outweighs the incremental benefits, thus presenting barriers to a fully integrated data stack across the demand side. Ultimately, that cost would be less of a burden if the process were to happen under one roof. As a result, we’re starting to see true interoperability happening most efficiently and effectively via acquisition.

DSPs Leading the Integration Charge

Using recent history as our guide, it’s relatively easy to assess which layers of the demand-side ecosystem would be best positioned to exist on their own, and which are primed for acquisition. DMPs and data providers are already being acquired by DSPs:the key players who connect advertisers and publishers. In the past two years alone we have seen several noteworthy examples: Nielsen’s purchase of eXelate, Publicis’s purchase of Run, RocketFuel’s purchase of X+1 and Oracle’s acquisition of BlueKai and Datalogix.

This has started to happen as a result of marketer demand, in conjunction with cost-sensitivities and efficiencies gained on the supply side. Marketers want a full-service data stack because they need cross-device applicability, measurability and targeted placements. DSPs are rolling up those services into a single integrated offering, and marketers are proving they will pay for the efficiency and simplicity that comes with that integration.

Whither the DMPs and Data Providers?

DMPs and data providers will not maintain their position as discrete offerings if they remain stagnant storehouses for data. They must continue to evolve their value propositions and to foster deeper connections to DSPs and to each other, incorporating more of marketers’ data demands into a one-stop offering. This transformation of DMPs and data providers will happen in one of two ways: either by pursuing deeper connections with DSPs or by exposing themselves to the reality of acquisition.