Neustar CEO Hook On TARGUSinfo Acquisition And The Opportunity In Advertising

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neustarLisa Hook is CEO of Neustar, a telecommunications company. Last Tuesday, Neustar acquired caller ID infrastructure and data company TARGUSinfo for $650 million. Read the release.

Hook discussed the TARGUSinfo acquisition and the strategy ahead - especially as it relates to advertising.

AdExchanger.com: What's Neustar's worldview on the opportunity in advertising and marketing?

LH: We recognize the potential in real-time marketing and analytics in this industry and this is a strategic reason for us making this acquisition. When we look at digital marketing and advertising in a world that is exploding with connected devices and multiple ways to reach consumers, advertising really has to change. It has to add value. It has to be appropriate. It has to be in context. As you know, people don't mind advertising as long as it is providing value to them.

How do you provide value to a consumer with digital advertising? You expose them to products and services that they find valuable. And the way to do that obviously, is to do audience analysis beforehand, to understand what type of content to serve up, and to whom. If I'm online or if I'm on my cell phone and I get an advertisement for football, I'm going to find it extremely intrusive because I have zero interest in football. But, if I get an advertisement for the latest pair of Jimmy Choo shoes, I'm not going to regard that as advertising, I'm going to regard it as value add. Our long-term view is helping the CMO and agencies deliver relevant advertising information to consumers based on what they value in an environment that makes sense to them.

We think the growth in digital advertising is explosive. I mean, truly explosive. The world is moving away, from non‑targeted media to a one-to-one relationship between the marketer and the recipient.

So why buy TARGUSinfo?

From a Neustar perspective, there's a natural fit. I'd say we are the brawn and they're the brains. We have vast amounts of information. We have the world's largest database of IP addresses. We know where those IP addresses are located - in many cases down to precise geographic locations, enabling us to expose anonymous audience attributes in real-time. We can do this both domestically and internationally. In New Zealand we actually know what sheep stations they're coming from.

We see 10 to 15 percent of the world's Internet traffic. We see every phone call and text message in North America. More recently, we've launched an initiative called the Intelligent Cloud and TARGUSinfo has been working with us on this. Companies like AT&T, Verizon, Sprint, Telos—all of the big operators are providing their network information to us so that we can expose those permissible, anonymous attributes it in a single API to a marketer.

We have the data - we have trillions and trillions of records that can be leveraged to provide value to marketers. What the TARGUSinfo acquisition gives us are teams like AdAdvisor, who actually know how to take all of our capabilities, data and records and create a value proposition for the marketing and advertising industry in a way that will be very compelling.

What is going to be the strategy for the audience buying space and as it relates to the current TARGUS team? Do you grow them? Does it change a little bit?

The current team is fantastic, and honestly it's a big piece of what we're buying, and we look forward to allowing them to focus on growing their businesses and to continue developing. Because we're a public company, we are going to integrate what we call corporate governance functions: Legal, HR, finance, corporate communications. We believe it's important to have an umbrella Neustar brand evolve elegantly.

We're looking for the AdAdvisor team and the broad suite of other TARGUSinfo services to be wildly successful and will continue to invest both resources and capital. We believe there are a number of ways the combined company can work together to deliver one plus one equals three results. That to me is the most exciting part of this acquisition.

Do you see a connection between this acquisition of TARGUSinfo and what you've been doing with Neustar-owned Quova has been in the advertising space?

Quova, to your point, has been in that space for a long time. So we're looking to do bring the groups together post-close and look at opportunities to grow both businesses. We will look at all these individual services and determine where there are compelling packages of value around brand management and brand protection that we can deliver to the market.

In addition to Quova, we are managing the US short code registry and continue to broaden our offerings in mobile by moving into QR codes. We are also big player in the registry space and a large number of new TLDs are coming online.

We're working with corporations to buy their brand and to support their brand launch in a TLD environment. We're not obviously well known in the display advertising industry and I would tell you that we're nowhere near the sophistication of TARGUSinfo, but we do have assets that we think we can bring to bear to make the combined company more visible and able to provide more end to end solutions for marketers.

What you're talking about seems to echo the holding company model that is currently in place in the agency world, for example. Thoughts?

Yes. I would say that we look at it that way at a minimum. An agency holding company doesn't actually wind up leveraging all of their capabilities and assets. We'd actually like to be more cohesive in looking for ways to build solutions for both the CMO and CTO. For example, simply presenting all the services we're selling into this particular vertical. What services are we missing? How could be round out the service package and how can we provide more value to the end user?

Neustar's business has really been for the most part been around this theme of "neutrality" - how does this relate to TARGUSinfo and the opportunities ahead?

Yes, one of our core brand values is neutrality. I think TARGUSinfo is widely regarded as a third party particularly in its original business, Caller ID. They enjoy the reputation of being a neutral third party that is highly trusted with high quality data. When we provide information on numbers for the phone industry, we're 100 percent accurate all the time. We never make a mistake. So we value quality of data and TARGUSinfo is one of the few providers of truly high quality data.

We also value reliability in delivery. We value privacy. The thing that attracted me particularly was the whole notion of privacy by design, security by design—these are absolutely the highest priority for us. So when we mapped our core brand values against theirs, the match was uncanny.

Finally, what's in it for the chief marketing officer with this acquisition?

Piece of mind. We want to be the company that is able to take a huge volumes of data, our data and your data, and deliver real intelligence back to the CMO in partnership with the CTO. There are a lot of companies out there that are saying we have a lot of data and we'll give it back to you. There are very few companies that are able to sort through that data and provide value added insights that a CMO can act on.

By John Ebbert

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