What is Taxonomy in a DMP?

AdTech Platforms, MarTech Platforms

What is Taxonomy in a DMP?

Updated on November 27, 2020 by

There’s a popular joke among software developers and engineers that goes like this: There are two hard things in computer science – cache invalidation and naming things.

In this post, we’ll be talking about the latter, naming things, in particular, otherwise known as taxonomy in a data-management platform (DMP).

What is Taxonomy?

Taxonomy is a broad system found in a number of different fields, including science, business, and education. Even the Wikipedia page for taxonomy states that it falls under six categories.

Even though taxonomy is a term spanning many fields, it can be defined as a system for naming things and organizing them into groups based on their similarities. While traditionally used in science fields, such as biology, it is widely used in data management.

Taxonomy in Data Management

Think about all the different tools and platforms you use that collect data. Each one of these uses different terms than the next.

For example, one platform might use “user” and another could use “visitor” to talk about the same thing.

Another common example is the term conversion; some platforms and businesses define a conversion as a purchase, signup, or even a white paper download. As a DMP collects data from a range of online and offline sources, the need to create defined, unified terms is paramount.

The goal of taxonomy in data management platform is to:

  • Organize data into groups based on their similarities and relationships between one another.
  • Create a hierarchy of all your data.
  • Make it easy to search for and use individual entries and groups (e.g. for data segmentation).

Creating Taxonomies in a DMP

There are three important things that need to be done when creating taxonomies:

  • They need to be relevant and unique to your business.
  • They need to align with your advertising and marketing strategies (or whatever use case you have in mind).
  • The taxonomies must be unambiguous and can’t contain duplicate terms/categories.

Creating Taxonomy Rules

Creating taxonomy rules allows you to automatically add new data entries to your categories in your DMP.

For example, an insurance company could set up a rule so that every time a new data entry with the attributes product=car-insurance was entered, it would be assigned to the Car Insurance category.

Examples of Taxonomy in a DMP

Below are a few examples of how different businesses could set up their taxonomy in their DMP.

Taxonomy for an E-commerce Site

Taxonomy is important for all types of companies, but more so for e-commerce sites due to the large number of products they stock.

Here’s a basic example of how an e-commerce store could structure their taxonomy.

taxonomy for an ecommerce store

Taxonomy for a Car-Sales Website

Car-sales websites are similar to e-commerce stores with their many categories. Here’s a basic example of how a car-sales website could structure its taxonomy.

taxonomy for a car sales website

Taxonomy for an Airline

Airlines offer more than just tickets, they also run frequent-flyer and membership programs. Here’s a basic example of how an airline could structure its taxonomy.

taxonomy for an airline

How to Create an Audience Out of Taxonomies

Now that we’ve seen some examples of taxonomies, let’s now have a look at how you can create an audience segment out of taxonomies.

We’ll use the car-sales website as our example. Here’s one possible audience segment they could create:

an audience segment created from taxonomy

The car-sales website could create a series of audience segments like this one so it could either sell to companies (e.g. insurance companies) or send to its supply-side platform to increase inventory value.

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