Netezza GM Terrell Says Ad Exchange Model Is Transformative Across Entire Industry

Brad Terrell of NetezzaBrad Terrell is VP and General Manager of Digital Media at Netezza, a data warehouse and analytic appliances company. What trends is Netezza seeing from its digital media clients in 2009?  Can you describe momentum for Netezza this year?  Revenues, deal size, vertical strengths, product interests, etc.?

We see consumer attention continuing to fragment across new digital channels – not just computers, but also devices like IPTV’s, smart phones, and gaming platforms.  These emerging digital channels are creating an explosion of data and a need for analysis of that data – both so that advertisers can measure the ROI on their advertising campaign investments, and also because analysis of this data enables direct response and predictive analysis techniques that dramatically increase targeting precision, and therefore campaign lift and ROI.

Netezza’s digital media clients are increasingly leveraging terabyte-scale data analysis to create competitive advantage.  And our clients are focused on a broad variety of different problem domains:  ad targeting, content targeting, yield optimization, click fraud analysis, website optimization, attribution analysis, search engine marketing, and more.  The unifying theme across all of these problem domains is that the big data challenges that seemed nearly impossible to solve just a few years ago are now easily within reach because of the fundamental technology breakthrough that Netezza has introduced.

Netezza produced revenue of $45.4 million last quarter, which represents a 15% increase over the same period last year.  Our digital media customers include many of the most compelling brands in the world.  Netezza is publicly traded on the New York Stock Exchange, so additional information regarding our financial performance is readily available online.

What type of ad targeting are you offering display advertisers? And how does ad targeting work with Netezza: do you have a platform that accesses other exchange and networks?

Netezza powers sophisticated ad targeting systems for many of the world’s largest display advertisers.  These systems offer every type of targeting capability imaginable, but behavioral targeting is particularly popular with our customers – both because Netezza makes analyzing the vast quantities of data involved so much simpler, and also because Netezza’s performance enables near-real-time analysis of that data, which is critically important to increasing targeting precision.  But to be clear, Netezza’s offering is a data warehouse appliance.  We’ve taken the concept of a relational database and instantiated in hardware – taking what historically has been 3 independent technology silos – database technology, server technology, and storage technology – and re-integrating them, which opened up opportunities to innovate across that entire technology stack and deliver an incredibly compelling value proposition – over 100 times the performance of a traditional data warehouse, at a fraction of the cost, with unmatched simplicity of deployment and operation.  Netezza provides a simple and high-performance solution for terabyte-scale data analysis that ultimately enables advertisers, agencies, and publishers to better deliver the right message to the right person at the right time.

How does Netezza tackle attribution? Do you offer attribution across a range of your online, ad targeting products (email, search, display, direct mail) simultaneously?

We recently published a case study (download here) on how one of our customers, GroupM’s Media Innovation Group (which was formerly part of 24/7 Real Media) powers their attribution analysis solution with Netezza.  In that example, as in all the others, Netezza’s unique value proposition involves making it simple to analyze terabytes of impression-level and user-level data with exceptionally high performance and low cost – regardless of the attribution methodologies our customers implement.

With your yield optimization capabilities, how do you differentiate with companies like AdMeld, Rubicon Project, Yieldex and PubMatic?

These types of firms provide services that help publishers maximize the value they get from selling their non-premium inventory through ad networks.  Netezza’s data warehouse appliance is a technology product that is the foundation of a best-of-breed yield optimization solution – large publishers implement their own yield optimization algorithms on top of the Netezza platform to maximize their revenue per ad (eCPM).

One of the “challenges” marketers identify is being overloaded with data and the consequent difficulty related to decisioning.  How does Netezza bring the data together for clients?   And for what types of clients are Netezza’s services best-suited?

Unlike alternative approaches to terabyte-scale data analysis, Netezza does not assume that all relevant questions can be fully anticipated for every given marketer.  Instead of requiring a pre-calculated set of static reports or analytics, Netezza’s performance enables marketers to ask any question of the data at the speed of thought.  This enables marketers to interactively explore the data in ways that ultimately lead to the insights that produce optimal decisions.  And importantly, Netezza’s performance in analyzing terabyte-scale data sets eliminates the need to sample or aggregate the data (techniques often required by legacy approaches to terabyte-scale data analysis, but which severely limit the flexibility and depth of insight available to marketers asking questions of the data).  Netezza’s open interfaces make it simple to bring together data from disparate data silos including Atlas, DART, Omniture, CRM systems, and more.

Netezza’s data warehouse appliance is well-suited for any company that requires terabyte-scale data analysis.  Ad networks use Netezza systems for the data analysis involved in ad targeting, ad inventory forecasting and sales analysis, ad attribution analysis, click fraud analysis, and more.  Agencies leverage Netezza systems for audience measurement and segmentation, multi-channel campaign analysis, direct response marketing campaigns, and more.  Publishers use Netezza systems for website optimization, content targeting, ad targeting, yield optimization, search engine marketing, and more.

What is your view on ad exchanges?  It would seem Netezza’s could be positioned to create an exchange given it’s specialization with business critical assets?

Ad exchanges promise to correct fundamental inefficiencies in the ad network market, and I expect their influence on the industry to increase over time.  The ad exchange model transforms the industry’s competitive frontier – moving it away from one in which reach and inventory quality are sufficient to create a competitive advantage, and toward one in which a competitive advantage is created through terabyte-scale data analysis.  That obviously plays to Netezza’s strengths – you might think of us as an “arms dealer” to the ad exchanges.

Is RTB (real-time bidding) and demand-side optimization an important development?  How will Netezza respond to RTB in that its digital media tools revolve around ad targeting?

RTB is certainly an important development – it is part of an inevitable evolution in an industry that is placing increased emphasis on leveraging technology to exploit market inefficiencies.  I’m seeing a steady stream of innovations across the market that create value in no small part by reducing data latency, and RTB is a great example of this.  Netezza’s high-performance data analysis platform enables optimal real-time bidding decisions.  And while the types of analysis involved in RTB scenarios will vary across the participants on any given exchange, ad targeting analysis is particularly relevant because the most targeted ad placement opportunities will typically command the highest bids, and Netezza’s performance increases targeting precision.

Could Netezza get in the data exchange or data sales business? In other words, you have the capability to store data – why not sell it? What models look attractive from your perspective?

Netezza will continue to focus on providing the media industry with the simplest and highest-performing approach to terabyte-scale data analysis – at the lowest cost available.  Our customers often derive competitive advantage from the data that they control – Netezza will continue to focus on enabling those customers to maximize the value of their data through the high-performance analysis we make possible.

I think the ad exchange model is a particularly compelling nexus of innovation for the industry – that is one of the reasons I’m a fan of your content.  🙂

Follow Brad Terrell (@bradterrell), Netezza (@Netezza) and (@adexchanger) on Twitter.

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1 Comment

  1. That’s interesting about Netezza. To your point about value proposition: increasingly tech companies are going to need some focus on their brand promise. With the nearly limitless capabilities technology provides, it’s easy for the R&D department to develop products with little to no value. Though they might be “cool,” they will offer little to the market. Thanks for the post.