Personalization platform Dynamic Yield has the distinction of having been acquired by not one but two large brands.
McDonald’s bought Dynamic Yield in 2019 for roughly $300 million dollars to help modernize and personalize its drive-thru experience, outdoor menus and digital ordering kiosks.
Late last year, McDonald’s sold the company to Mastercard for an undisclosed sum. (Later, during its Q2 earnings, McDonald’s reported a $271 million gain related to the sale of its Dynamic Yield business.)
“I guess this is just our destiny,” said Ori Bauer, who transitioned from CTO to CEO of Dynamic Yield in April after the Mastercard deal closed. Liad Agmon, Dynamic Yield’s co-founder and former CEO, is now a part-time advisor to Mastercard.
We know you want fries with that
The plan was never to make McDonald’s its permanent home, Bauer said.
The purpose of that acquisition was to give Dynamic Yield an inside look at how the restaurant business works so that it could build technology and solutions for McDonald’s that were specifically suited to the QSR vertical.
Historically, most of Dynamic Yield’s clients used its technology to deliver personalized shopping recommendations on their websites. But an ecommerce experience is a lot different than an in-restaurant experience.
There’s no add-to-cart-and-think-about-it-later option when you’re making your way through the drive-thru.
But there is the option for people who have downloaded the McDonald’s app to identify themselves when they’re in front of a digital kiosk, which means the recommendations can be personalized based on their past orders.
For people without the app, McDonald’s can recommend products based on general purchase patterns. If someone orders a veggie burger, for example, it might not make sense to recommend adding a side of chicken nuggets to their ticket.
Despite the acquisition by Mastercard, McDonald’s is still a Dynamic Yield client. It has its former subsidiary’s recommendation technology integrated within digital kiosks across 15,000 locations in the US, Australia and Canada, which is just under 40% of all McDonald’s restaurants.
The technology isn’t proprietary, though, Bauer said. Having developed a taste for QSR, Dynamic Yield plans to court other potential customers in the category with the promise of personalization.
But it hasn’t been all burgers and roses. I mean flowers and fries.
An internal review by McDonald’s found that Dynamic Yield’s technology was responsible for fewer sales “than originally reported,” according to The Wall Street Journal.
Although Bauer declined to share specific numbers, he did say “McDonald’s remains a very large customer of ours in terms of revenue and the impact that we provide to them.”
New master
Dynamic Yield’s new parent company, Mastercard, is no stranger to ad tech acquisitions.
Mastercard bought loyalty-management-platform-cum-CDP SessionM in 2019 to help power its loyalty program with personalized, real-time offers and to help with closed-loop measurement at the point of sale.
SessionM and Dynamic Yield have complementary offerings, said Bauer, who noted that roughly a third of Mastercard’s revenue comes from services other than payment processing.
Dynamic Yield is now a part of Mastercard’s Data & Services division, which includes marketing services, consulting, self-service analytics tools for business account customers, access to insights based on aggregated and anonymized transactions and a test-and-learn analytics tool that brands can use to measure marketing impact.
Mastercard will use Dynamic Yield’s technology to bolster these offerings, which is a growing part of its business. Mastercard’s net revenue from services has increased 118% over the past five years.
And there’s also the opportunity to bring more personalization into the consumer-facing banking experience.
People have come to expect at least some level of personalization regardless of the experience, Bauer said, whether they’re watching Netflix or using their banking app.
“People have less or even no patience for applications that are not personalized,” Bauer said, “and that’s as true for financial institutions as it is for any other vertical.”
