Demdex CEO Nicolau Says Ad, Data Exchanges, And Data Management Solution As Key To Mining Data

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Randy Nicolau is CEO of Demdex, a behavioral data management company.

Randy Nicolau of DemdexAdExchanger.com: What challenge is Demdex looking to solve in behavioral advertising data?

RN: Demdex gives its clients the speed and flexibility to understand and adapt to that rapidly changing "audience data" marketplace. We help our clients better understand the value of the behavioral and demographic data that is either purchased from third-parties or harvested directly from their website(s). We maximize the value of that data by making it easy to understand and available for use in all their online efforts rather than being tied to a specific platform or technology. To achieve this we provide our clients with a variety of tools and technologies that facilitate the efficient collection, organization, segmentation, and analysis of their behavioral data. Additionally, we integrate this data with all the platforms used by our clients (like ad servers and buying platforms) so their technology teams don’t have to deal with this, all the while enforcing the rights of the data owners and the consumer.

What is a "behavioral bank" and "TraitWeight"? Can you share some of the technologies tracked traits?

"Behavioral Bank" is the metaphor we use to describe a client’s exclusive data repository. Each of our client’s data is safely stored in their own data "vault" and each data point is wrapped in a "rights management" solution that allows Demdex to enforce the rights of the data owner when data is being moved to third party systems like demand platforms and ad servers.

TraitWeight™ is our proprietary data scoring methodology that determines the confidence (or significance) of each behavioral and demographic signal we receive about a user. It is a statistical methodology for removing all the "noise" and culling to the surface the meaningful, reliable data because, let’s face it, everyone is drowning in data and most can’t make heads or tails of it. We track and score over 50 standard traits like gender, income, and "in-market" activity. Additionally, we create and score the "custom" traits that are unique to each of our client’s business.

How are considerations for creative (banners) addressed with the data bank?

Demdex is NOT an ad server nor an optimization engine. We create the "fuel" (i.e. the marketing data) and we make it available to our clients’ ad servers, optimization partners, demand platforms, etc.

How easy is the set-up? Is it a question of adding tags in campaign clickthrough URLs in the ad server? How far does the integration go?

The Demdex solution is "iPod Simple" to set-up and use. We have developed all of the "apps" our clients need to collect data from third-parties, harvest data from their own websites, organize their data, create custom segments, and analyze the data they buy from third-parties. In terms of empowering our clients to use their data in third-party systems, we currently integrate into all major ad serving technologies (e.g. Google’s Dart, AOL’s AdTech, OpenX, etc.), all the major demand platforms (e.g. Media Math, Invite Media, and Turn), and we are adding new integrations weekly.

Regarding the Demdex business model, how much does the service cost?

We have two simple pricing options. The first is a per-user fee based on the number of records we manage (we call this a "Monthly Active User" or MAU). This pricing model scales nicely for our clients since our costs are not directly tied to the number of times the data is accessed. We see our publisher and ad network clients choosing this option most frequently. The second pricing option is a CPM based upon ad deliveries. This pricing model is fixed to the number of data-targeted impressions served by our clients. We see our ad agency clients more commonly selecting this option as it is easier for them to pass the costs on to their advertisers.

How do (and will) ad exchanges impact your business?

Ad exchanges continue to have an incredibly positive impact on our business as do data exchanges like Blue Kai. Advertisers and agencies are in the preliminary stages of learning how to "mine data" like we see in the offline world. To do this efficiently, you need ad exchanges, data exchanges, and a data management solution. Demdex is the data management solution that makes the entire equation operate most efficiently.

What do you think of social targeting? Does the "birds of a feather" mantra ring true with you - where social "friends" tend to be like-minded consumers who exhibit the same buying habits?

When I look at my online social circle I see that we don’t use the same mobile phones. We don’t drive the same cars, have the same credit scores, buy the same electronics, or even like the same sports teams. Now I realize this is only a single data point and you can’t draw a trend from just one data point, so I’d have to say the jury is still out on social targeting. I have no doubt there is "some" value to unlock, and if there is, Demdex is in the position to help its clients do so.

Who do you see as key competitors to Demdex? And your target market?

For companies stuck in "Behavioral Data 1.0" there are solutions like Dart Boomerang and Audience Science that offer some version of behavioral data management. However, for companies looking to capitalize on "Behavioral Data 2.0" in which data is unlocked and can be ported to multiple platforms and destinations, Demdex has the clear head start on all competitors. We think it’s only a matter of 3-6 months before this space begins to flood with lookalike companies trying to reinvent themselves. By then, Demdex will have at least a two-year jump and will have established itself as "the Akamai of behavioral data management" – i.e. the gold standard.

Does Demdex store campaign data such as attribution metrics and specific conversions, too? Or is it just behavioral data?

Demdex only stores data as requested by our clients. We have the capabilities to store and score all data that can be used for commercial purposes which includes campaign and conversion info, cart abandons, etc.

How has your experience at Azoogle prepared you for Demdex?

It was really more than the Azoogle experience that gave me this perspective on the behavioral data landscape. First it was the 10+ years I spent as an offline data miner learning how to decipher the good, meaningful data from the bad. Next, it was running a large online media company where I developed the understanding of publisher-specific needs for accessing this valuable data. And finally Azoogle, which is an ad network that sits between publishers and advertisers, gave me the perspective on the value of making data available in multiple channels and across multiple platforms.

How are you addressing PII concerns? What are your views on how the industry should address privacy concerns?

From "day one" consumer privacy has been in the forefront of our thinking and product development. At the time we launched the beta with our first client we also launched DoNotTarget.com. DoNotTarget is our consumer privacy management platform. It is an easy to remember destination, like "Do Not Call" for telemarketing and "Do Not Mail" for direct marketing. Any of our clients that wish to give their users the ability to opt-out of receiving behaviorally targeted ads or content can direct users to this website (usually through a link in their privacy policy) where users can easily opt-out. Since all the data that is collected and actioned by our clients flows through Demdex we are in the position to enforce the privacy policies of our clients and the preferences of their users.

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