Krux is looking to overcome its industry perception as a publisher-focused data-management platform (DMP).
This is one of the reasons why it hired Jon Suarez-Davis – previously Kellogg Co.’s VP of global media and digital strategy – as its chief marketing and strategy officer. Suarez-Davis officially starts Thursday and will report to Krux CEO Tom Chavez.
“My goal is to get that [marketer-to-publisher] balance to 50-50,” he told AdExchanger. (He wasn’t sure what the current ratio was since he’d only just started.) “I would like equilibrium. My very first order of business is to articulate our value proposition to very key segments, primarily to the marketing segments.”
Despite Krux’s roots serving publishers, Kellogg’s – one of the early adapters of programmatic media buying – opted to work with it two years ago. Suarez-Davis, an exec at the food manufacturer since 2009, recalled Kellogg’s internal debates about partnering with a DMP that didn’t have as much of an advertiser heritage.
Eventually, the idea that Kellogg’s would be able to “co-create” advertising campaigns with publishers won out.
“We’ve got very valuable first-party data on the marketer side,” Suarez-Davis said. “Publishers have very valuable second-party data – or first-party data to them.” Mingling those data sets, he added, empowers marketers.
He remembered a campaign Kellogg’s did with NBCUniversal.
“We were looking for incremental reach for a certain segment,” he said. “Krux, with its relationship with NBCUniversal, could look into that universe and offer us that reach and impressions. We could get people we wouldn’t have otherwise known about.”
It’s a connection that fundamentally changes the publisher-advertiser dynamic, Suarez-Davis said.
“At the end of the day, it’s still a financial transaction. That’s clearly important – but it changes the discussion from CPM-based proposals to how data and content can meet the needs against a problem we’re trying to solve.”
While Kellogg’s was an early entrant to programmatic – it dove in roughly five years ago and now sees upward of 75% of its North America online media transacted programmatically – it first did so without any DMP at all. Initially, Kellogg’s focused on building out its first-party data, and worked with companies like Invite Media (since acquired by DoubleClick), Right Media Exchange (since shuttered by Yahoo) and BrightRoll (since acquired by Yahoo). It used third-party data segments and harnessed programmatic primarily as a means to sort inventory.
But onboarding the DMP changed things for Kellogg’s.
“When we first leaned into programmatic, we didn’t have a DMP so we leaned heavily into open exchanges,” Suarez-Davis said. As it got familiar with Krux, Kellogg’s became more sophisticated and began initiating direct partnerships with publishers like NBC, Meredith and others.
“[Kellogg’s] is still active in the open exchange,” Suarez-Davis said, “but when we got our data strategy and our DMP and started understanding what private exchanges could offer in terms of incremental reach and higher-quality inventory, we shifted and started lighting up more private exchange deals.”
Another reason Kellogg’s picked Krux is because it’s a pure-play DMP. It came with no data exchange, it didn’t have a media-buying business it didn’t have a connected demand-side platform (DSP). The decision to focus on an unbundled DMP, rather than a DMP-DSP hybrid, was straightforward.
“We believe the data is a company asset that we must leverage and hold it close,” said Suarez-Davis. “We wanted to make sure it was unbundled so we could switch DSP partners and not have it tied back to our data structure. If we’d gone with a DSP-DMP bundled, we wouldn’t have been able to go to another one.”
Kellogg’s has an internal motto: Investment follows performance. The company tests a bunch of tech and whichever wins out gets the check. In adherence to that philosophy, Kellogg’s needed to run numerous DSPs with Krux to see how each performed – which was why an unbundled platform was crucial.
And as new, better DSPs entered the market, Kellogg’s wanted to plug-and-play the DMP data with whichever private partner it selected.
“A great DSP can hit the KPIs we’re giving them – be it demographic or psychographic,” Suarez-Davis said. KPIs might include viewability, target index or the ability to simply get out and find the right target. “If you have great data, but you can’t effectively target an impression, then it doesn’t work. And if you can find the inventory but don’t have the data to target it, it also doesn’t work.”
Suarez-Davis acknowledged the potential downsides to decoupling the DMP and the DSP. The potential for data leakage, for instance, came into play, as did the possibility that data transfer speeds would decrease. But then again, he wondered, does a quarter of a nanosecond make all that much difference vs. half a nanosecond?
“At the end of the day, we acknowledged these as issues, but we went back to the principle: The DMP should be independent,” Suarez-Davis recalled. He noted that one of Krux’s selling points was data security for its publisher clients, which alleviated Kellogg’s fear of data leakage.
Of course, DMPs aren’t new technologies and it’s fair to wonder how Krux can penetrate the marketer community. Assuming an advertiser already works closely – or even owns – its own DMP, it’s a tall order to convince it to rip and replace its existing data infrastructure.
But Suarez-Davis believes, based on his conversations with his marketer peers, that DMP penetration within the advertiser community lags. “If you canvassed the top 250 marketers by ad spend, you’d be shocked how few have DMPs,” he said. “Mass media is still the bulk of advertising investment. There’s still a ton of dialog around the basic fundamentals of programmatic – even if you’re just talking about real-time bidding. It’s a challenge for a major marketer to develop a data strategy and implement it.”
Suarez-Davis recalled the initial pains in helping to build Kellogg’s data initiatives. In retrospect, he said he would have implemented technical components and hired more internal data scientists earlier.
“It goes back to my comment: The top 250 marketers are not designed to look at data insights in this near-time and real-time behavioral world we’re in,” he said. “It requires smart folks, data scientists with analytics capabilities in-house as well as the partner ecosystem to truly get this going.”
So Krux is mobilizing toward what it sees as open territory, ready for claiming.