Commerce media just went shopping.
On Thursday, ecommerce marketing company Rokt acquired customer data platform mParticle for $300 million.
Word to the wise, “Rokt” is pronounced “rocked,” not “rocket,” just FYI.
Although the press release frames the deal as a merger with Rokt investing in mParticle, Rokt is taking a 100% stake in the company, Bruce Buchanan, Rokt’s co-founder and CEO, told AdExchanger.
The wording of its deal structure aside, Rokt’s acquisition of mParticle comes somewhat out of left field, because why does it need a CDP?
Part and particle
Almost exactly one year ago, Rokt acquired AfterSell, a post-purchase customer experience and upselling service for Shopify merchants. That deal makes perfect sense, since Rokt serves ads and offers on retailer and media subscription post-purchase pages.
But the rationale in this case is more about merging two companies that serve a similar market and improve Rokt’s service in ecommerce marketing beyond advertising, which is actually a minority of the company’s revenue, according to Buchanan.
More than 90% of Rokt and mParticle’s respective client bases are made up of enterprise retailers and brands that spend more than $5 million per year on each business’s software. In cases where their clients overlap, Buchanan said Rokt’s performance went up by as much as 50% compared to other CDP or identity solutions.
One reason for the improved performance is better match rates, but there’s also more to it, said Michael Katz, co-founder and CEO of mParticle, who’ll remain in the role post-acquisition. Retailers who work with Rokt and mParticle also use them for retention marketing after a purchase and to grow their loyalty program or credit card program.
What’s attractive about mParticle is that it’s a live feed of data, Buchanan said. Rokt has only a moment – the time between when a purchase is made to when the confirmation or checkout page loads – to come to an understanding of who a person is and the potential deals or upsell offers they might consider.
RIP to the CDP?
The CDP category has undergone vast consolidation over the past few years.
Oracle, Salesforce, Twilio and other big players acquired point solutions. And in the past month alone, two other notable independent CDP vendors were acquired: ActionIQ was bought by Uniphore and Lytics went to Contentstack.
When mParticle first got started, the CDP moniker didn’t exist yet. “Nowadays, everybody’s a CDP,” Katz said.
To continue mParticle’s mission as a customer data platform, he added, the company has to get “closer to the value creation layer.”
One challenge for CDPs, according to Buchanan, is that investing in data services and integrations is hard to justify for a software solution that doesn’t directly involve itself in the ad targeting, attribution or bid decisioning. CDPs typically remain an impartial source at arm’s-length to those services.
“To fund the investment required,” he said, “you need to be close to the source of value and recognize what actually matters.”
And Rokt knows full well the value big brands attach to data that might convert customers in the moment.
“Let’s not get too hung up on the category name and whether people need to sign up for a category name,” Buchanan said. “What we do know is mParticle produces a unique outcome because of their real-time capabilities.”
This is the fourth ad tech acquisition this week. On Monday, T-Mobile acquired digital out-of-home company Vistar Media and on Wednesday The Trade Desk bought ad tech metadata startup Sincera. Also on Wednesday, DirecTV took a majority stake in addressable TV platform Invidi.
