DataXu, provider of the industry’s no1 ranked DSP today (10 Jan 2012) announced that it had acquired Europe’s leading DSP platform Mexad.
Read our Q&A on the thought process behind the decision and more with DataXu’s Vice President of Marketing Jule Ginches below.
Rumor has it, DataXu’s technology was originally developed for the Mars Lunar Lander – how did you go from space to digital advertising?
DataXu was co-founded by CEO Mike Baker and by Dr. Edward Crawley, Ford Professor of Engineering at MIT and Professor of Aeronautics and Astronautics whose team was studying advanced aeronautics and designing mission control systems for NASA. Two additional co-founders, Dr. Willard Simmons and Sandro Catanzaro, worked on MARS mission planning with Dr. Crawley at MIT using a combinatorial optimization language they had invented.
The project was an enormous success, and led the team to consider how this technique could be applied to commercial situations. There were a lot of possibilities, like healthcare and renewable energy, but these industries weren’t quite ready. The Internet, on the other hand, is like one big sensor and it’s iterative; it supports multivariate testing to gather information quickly. Advertising is a trillion dollar market with 20% already allocated to digital, and that share is slated to go to 100% by 2020, when essentially all data and media will be digital. For our founders, online advertising presented a highly relevant and untapped opportunity to use the team’s patented real-time data-driven decisioning technologies, and DataXu was born.
What was the primary goal behind the acquisition of Mexad – global expansion? Filling in tech gaps? Why was this the right time for DataXu to make an acquisition?
We have the #1 ranked DSP current offering, but as an enterprise software company we need global service capabilities to deliver expertise and assistance to agencies and brands as they move up the learning curve. Every country has its own unique challenges and nuances. Mexad has coverage across 60+ countries, leading market share in Europe and Latin America, and superior local expertise in key markets. DataXu has grown 3x this past year and we needed to provide talented local experts to effectively serve the multinational advertisers that partner with us.
As Mexad is foremost a European operator, do you have any concerns about the EC privacy directive?
First off, Mexad has a team of experts that are accustomed to dealing with EU country-specific regulations, including, Germany, which has extremely strict privacy laws. Secondly, our system is one of the few that offers custom audience management capabilities but can also run prospecting campaigns that aren’t reliant on cookies – so it will be easy for us to comply with different directives.
DataXu came out looking pretty nice in Forrester’s recently released DSP Wave report – what do you feel were the most significant findings in the study? What was left out?
Yes, we were delighted to see our fully-integrated digital marketing management platform, DX3, ranked as the #1 current DSP offering in Forrester’s recent report – especially since 36 vendors were originally evaluated and only a small number actually qualified to be ranked. We may have come to market a little later but we’ve certainly proven ourselves with greater innovation and capabilities. Significant findings from the report included validation that we have superior algorithmic optimization, brand safety, inventory quality and data access and support. What was missing was acknowledgement of true multichannel capabilities built right within the UI. This would have helped weed out marketing hype from real, sophisticated technology capabilities.
What do agency ad ops professionals most need out of their DSPs? What makes their lives easier? What still needs work?
Making their lives easier means providing them with one platform for all digital channels. And choosing just one DSP alone would significantly help them. Running multiple DSPs is like the equivalent of asking a CFO to test three accounting systems for a year and then report on what they liked better after a year. That alone is making their lives unnecessarily harder. What these professionals need most is differentiated reporting and unique insights to help them do their jobs more effectively and deliver more value to their clients. Another benefit for them would be solving the cross-channel attribution problem so they can run media at optimal efficiencies.
What changes do you see coming to the DSP space this year? Further consolidation from without or within?
We see further consolidation as customers move away from point solutions towards integrated technology platforms. Having the best technology is only part of how we became the leading player in digital marketing management. Indeed, as the digital market continues its rapid growth, brands and agencies are seeking partners who can not only integrate all of the digital pieces but also provide data and analytics experts that can support them on a global basis. That’s why we acquired Mexad, which is highly regarded for its expertise, service quality, and trustworthiness.
While the transition to a pervasively digital world is disruptive and confusing at times, one thing is clear: Data is the new currency. Companies that can collect it and act on it in real time will win in the digital era. As for consolidation, it’s clear we are focused on being a strategic long term partner and building a company to last. Let’s say we plan on doing a lot of the consolidating.