The Neustar-Aggregate Knowledge Paradigm Shift

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AKWhen Neustar, a company whose telecommunications infrastructure routes calls and texts across North America, purchased data-management platform (DMP) provider Aggregate Knowledge (AK) last October for $119 million in cash, analysts and industry insiders wondered – as they do with every acquisition – what the integrated solution would look like.

For Neustar's SVP of Marketing Services (and former CEO of AK) David Jakubowski, the acquisition is about expansion. In particular, it’s about efficiently connecting offline and online data environments in a world where marketers are blasted by data, much of which is changing too fast for them to properly catalog and analyze. At the same time, the technologies designed to makes sense of this data flow exist in a competitive landscape that's often extremely difficult for marketers to process.

While Jakubowski said he believed AK’s technologies could help alleviate some of these issues, he also felt its status as a standalone company limited its scope. His hope is that the marriage with Neustar will create a vendor ecosystem for marketers similar to what Salesforce.com has done with CRM, SAP has done with technologies for financial services and Amazon has done with databasing.

“We’re trying to provide services so [marketers] can do their jobs better in a more cost-effective way,” Jakubowski told AdExchanger. “We realized we have to be part of a bigger thing.”

The past three months have been big for AK. Besides the acquisition, the company also formed a partnership with Omnicom in which the holding company’s digital data and analytics unit Annalect will standardize on the AK DMP. Jakubowski spoke with AdExchanger about what’s next.

AdExchanger: Why Neustar?

DAVID JAKUBOWSKI: Two big keys: The first was they were neutral. The other suitors had [the right] technical capabilities [but] were trying to sell the marketer ad inventory generally. That was their angle. Marketers will only put so much information into that. We see this already with the information that gets loaded into ad servers. Generally they aren’t the real numbers from the advertiser, and they have a back-end process to reconcile CPA numbers, lifetime value numbers, all these things that were germane to whether the ad campaign did its job, and they fill in those blanks later in manual arduous processes that don’t flow through every day. So you’re often left with partial information. And the reason for that is they don’t want the ad servers to know everything.

What’s the second?

The second thing is offline to online. [Neustar] dominates offline validation and verification for point-of-sale (POS) information. If you want to know if something is right, if your lead is correct, then the biggest player in the space validating those things are happening properly from a verification standpoint is Neustar. They have an identification and verification product as well as maintaining TCPA (Telephone Consumer Protection Act) compliance, which maintains all the rules around what numbers are mobile vs. landlines. That created an easy bridge for offline to online.

To what extent was AK as a standalone able to bridge those two?

[Before Neustar] we had massive reach in the online world, but didn’t have that in the offline world. CRM and POS can get tied to ad data so [clients] get a full portrait of their customer, and what that actual value is and the campaigns that are having an effect.

How are you telling the Neustar-AK story?

We go to the marketer and say, “You have a spectrum of things: a marketing department, a compliance department, a CRM department. All of these things need the same information. You’re spending big dollars with folks like Teradata, IBM or Oracle to do these huge projects, because everything is custom.”

It’s a little like what happened in CRM software. For a decade or more, Siebel would go in and have giant engagement to do custom things for enterprise-level customers around these solutions. Because every customer needs something a little different, you’ll pay me $40 million on the engagement, then $10 million license fees every year to maintain it, [and customize it so it does] something different with the billing system, something different with the retail point of sale, something different with the catalog system.

Then Salesforce came along and allowed API-based plugins of all that information in an easy-to-use, SaaS-based product that cost pennies on the dollar. And it had a lot more customers. It took enterprise customers a while to realize it’s a paradigm shift for a fraction of the cost and twice the output.

What has been the reception among your sales staff and your clients to this messaging?

We tried to do this a year and a half ago. It was complicated and it slowed down our sales cycle. When we pared it down and made it easier to buy [AK technologies], that’s when AK got a lot of its traction.

The market has evolved in that time so really in just the last 60 days when I talk to these customers, it’s not us going to them saying they need to change. I have a feeling it would’ve been like that had we done this acquisition a year ago. But I walk in and sales guys are saying they’ve got customers asking them how to do this, and can I come in and explain how to do this to them.

How have you integrated AK’s technologies with Neustar’s?

The best way to integrate software is not to try. And I was the guy on the product side on Microsoft who inherited all of those acquisitions they made, and trying to migrate software to D1 codebase is a fool’s errand. So we don’t try. At AK, we broke architecture into pieces and created a series of APIs and allowed each different module to talk out to an ecosystem-like world. Many of those functionalities at AK only talked to internal products, but they were very different teams with different resources with different goals that had to move to an agile environment, so there was a necessity for those teams to talk to each other.

That created a modular type of infrastructure. Much of like what Google does today is the model that we took. It’s not new stuff. We didn’t invent it, it’s not uncommon. It just takes a lot of discipline.

When did you begin integrating into Neustar?

About six months prior to the acquisition, we began an integration with Targus [a Neustar unit whose databases identify who is calling and from where] on a commercial deal. They’d purchased a license to white label AK. And in that process we figured out that a bunch of the new Neustar products were built in much of the same way [as AK’s]. The legacy ones weren’t, but the new ones were. We actually had that portion of the integration because of that commercial deal.

How are the combined Neustar-AK marketing solutions now structured?

I had to take the marketing service products, 47 different point solutions, and figure out how to group them by function and then put them on common infrastructure stacks. Now we have three basic infrastructure stacks on the backend where we’ve completed the roll-up of all 47 products into nine solutions across three lines of business under marketing services: Customer intelligence, which would be all the things around identification and verification. Media intelligence is all the Aggregate Knowledge measurement – the traditional DMP that moves cookies around. In the middle sits activation – how data gets to places. That’s the BlueKai version of the DMP where you have to put data in lots of places.

We’ve added into that ad-server integration. We did an integration with AppNexus where if you’re an AppNexus customer, all of the AK pieces are built inside of it, so if you want to use them you can do it in one UI.

Those three businesses have been reworked and we moved the team I inherited into that agile framework across those three infrastructures so it was more about breaking up the software than merging software from a philosophy standpoint. We finalized all of that and we’ve launched it and we’ve been operating like that since the new year started.

So the integration work is complete?

From [a] marketing services standpoint, it’s complete in terms of what’s broken up. Now that I’ve broken them up, there are a million things we want to do. We want to open up more APIs to the ecosystem so you don’t have to just use our UI. If you’re an app developer and you just want to do verification so you’re not selling out data you’re not supposed to and you just want to use the verification APIs, go for it. If you want to use the measurement stuff, because you have to provide reports to your customer, go ahead and use that.

There’s a lot of work around permissions and enablement of [data] views across an ecosystem that consists of advertisers, publishers and data resellers who [all] want different views. Our customers at agencies want certain views available for certain partners. Everybody wants to look at something, but they want to control that information flow.

AdExchanger Research Director Joanna O’Connell contributed.

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