Placements Are Dead, Long Live Audience Says Krux’s Chavez

kruxWith Krux’s initial conception of its publisher data management platform (DMP) nearly complete, CEO Tom Chavez is thinking about what’s next for his 2.5-year-old company.  Chavez says, “We had a broad idea of all the pieces that we wanted to conquer, and within the last year, those puzzle pieces have come together. It spans not just data protection where we started, but more importantly into management  the segmentation and authoring of audience segments as well as tag management.”

From Chavez’s perspective, and considering what he says he sees from publishing clients, the DMP is hitting its stride.

AdExchanger spoke to Chavez about his company, industry trends and what’s next.

AdExchanger: So do you call yourselves a DMP right now?

TOM CHAVEZ: It’s a funny thing. Two years ago, I resisted the moniker. It wasn’t clear what DMP meant. In theory, it could apply to about 25,000 different companies on the planet. But now, as it has taken shape in our space, people understand that data equals data about consumers: what they want, where they’re headed, what they like, and what they’re doing on the web.

I’ve accepted the term. I’m still not convinced that it’s the most apt descriptor. At this point, it‘s the term that fires off the right patch of neurons for everybody.

How is the DMP doing in terms of understanding the real value of data? Publishers and technology players seems to have struggled to put a price tag on data – or have overvalued it.

The valuation of data is still unfinished business, and if we keep things in context here, it’s arguably only been a year or two that the industry has really gotten going with the DMP. It makes sense to me that we still need to figure this out. There’s no question that lots of publishers come with lots of strong opinions about how valuable their data is.

Not all data is equal. [There’s opportunity for] publishers with sector-specific engaged audiences…of interest to marketers. It’s travel and auto, but it’s [also] financial enthusiasts and entertainment junkies. If you can find them all on your website, those definitely create more differentiated value in the short term.

“Peanut buttering” of data  using broad swaths of traditional demographic and technographic attributes  is less interesting and therefore less valuable. Krux is moving to a point within the next nine months where customers on our platform will be able to see a mark-to-market, if you like, for different segments of audiences and then use it to price their audience offerings for advertisers more effectively.

Beyond ads, how about commerce or editorial? Is Krux active with either of those publisher areas? Thoughts?

Many of our customers in the news sector are using insights we generate to drive content and editorial decisions. But it’s not happening in a programmatic way yet. With commerce, we’re working with a couple of key players whom we’re not able to talk about yet publicly but who  use DMP technology to drive more effective commerce offers  not just on their own site but in a cross-web fashion  so they’re making use of the exchanges and programmatic to drive more effective commerce initiatives.

How does Krux address the so-called programmatic “premium” or programmatic “direct” opportunity – depending on your favorite nomenclature?

Let me digress a bit first…There are places where, particularly in the private exchange, the publisher wants to have more direct control over who gets access to what. If it’s in a non-private exchange environment, they still have an equal interest in claiming value from that “premium” inventory, which is increasingly dependent on the audience data powering the inventory.

Placements are dead. Audience data reigns supreme, right? Who’s looking at the screen is much more important than what’s on the screen.  That’s obviously a very good thing for Krux, underscoring the relevance of DMP and some of the big bets we made a couple of years ago.

In regards to programmatic premium, the issue is who has control of data because you don’t want to perpetuate what’s happened these last many years, where other people are claiming value from your data. Arguably, there are too many players in the market peddling advertising powered by data that, arguably, belongs to the publishers. Programmatic premium makes that an even more difficult challenge.

What we’re doing with clients moving into this spaces is creating a data DMZ, if you like. That allows them to throttle, connect the data in a reliable, safe way with the places and advertisers and partners where they want it go, matched to real-time inventory for the exchange – but think of it as a parallel track.  The model we’re driving is one where publishers take control of the data.

Is there an offline application to Krux’s DMP today?

Our conception has always been that offline and online eventually emerge. Already we’re working with publishers to synthesize offline  many of them have subscriptions, registrations and CRM assets in offline systems  with online.  Registration and subscription can energize online advertising offerings that raise the value of inventory in a dramatic way.

What’s the most popular use case today for your DMP? Please describe it.

So let’s say you’re a socially-oriented site where you create lots of content and information about personalities. And then Apple comes to you and says, “I’d like to run a campaign.”

As a publisher, you want to be able to take that and respond to a broader set of advertising possibilities. You may have data on social activity on your site tied to people who are fans of singer Lana Del Rey.  Now you start to qualify that audience in a meaningful way from your own first-party traffic. And you can expand upon that by layering on technographic information about users on a PC versus mobile.

Next, you might enrich it even further with demographic or household income information provided from DataLogix.

To be clear, we’re talking about the Krux platform “cookie-ing” the user, recording that the user is, on behalf of the publisher, sharing a Lana Del Rey article and who is then recorded into your DMP?

Yes.  We have a multidimensional view of the user all over the places and ways that they interact with a publisher’s content, and that helps us parameterize them as a qualified Apple enthusiast in this case.  You’re able to find those users in densities that are meaningful enough to power an advertising campaign.

But, even better, let’s say Apple would like you the publisher to extend the audience. Krux can help you take that [publisher] audience and then find and target it across all of the programmatic exchanges. We’re bringing that extension capability as well.

Let’s turn to the privacy discussion around data. There’s the “cookie” and self-regulation. There’s also something called “hashing” used to bring offline audiences online.  Seems like a lot for an industry to regulate on its own.

There’s always the opportunity  to some degree – to do bad things with that data…but that brings us to “trust.”

Arguably, trust is the most important fuel, the most important asset we have. Once trust is gone, I think our business crumbles quickly.

Are you a supporter of self-regulation?

I absolutely believe in self-regulation. But let’s back this up for a minute. The space we’re in is so complex it makes my head hurt   and I’m a hard-working guy. It’s hard for me to imagine a context where regulators and legislators could come in to tame or conquer that complexity,  instituting new rules that can actually help us maintain a healthy ecosystem while achieving the policy objectives we‘re after. It really does raise the stakes on self-regulation.

The way the dialogue in the industry has shifted towards stewardship of data, data usage, privacy, as well as all of the conversations over fraud, fraudulent inventory and how to fix that  there’s a lot of energy. The industry has demonstrated a lot of responsible action, and though the work is never done, I think that’s absolutely the right path.

Technologically, what’s the big challenge you’re grappling with in your platform today?

The big challenge is mobile in-app, specifically with a view towards synchronizing mobile with online; the jury is still out. We don’t know exactly which way the cookie crumbles. It’s clear that iOS is a huge force to be reckoned with, and in-app data collection is the way the market has tilted these last six months.

The moves that Apple has made in the last six months, obviously, make it harder, not easier, for us to find and manage audiences in iOS.  There are a number of folks out there talking about their ability to track users in a mobile context. When you start unpacking several of those claims, we’re pretty skeptical. I think there’s going to be a lot of hype around mobile audience data management.

The content with the mobile cookie isn’t even well-founded. It doesn’t even make sense on its own terms. There’s all this talk about statistical mobile cookies and the like. Again, we’re quite skeptical. We’re not saying we’ve licked that problem. It’s a big, big challenge, and I think folks should be wary of some of these breathless and caffeinated things that some people are starting to say in the context of all that data.

Does having users log in a mobile environment create audience targeting capabilities in, for example, an iOS or environment that prevents cookies?

It does once you have a logged-in user tied in, typically to an email key. Then with very high confidence, you can match that user.

How we implement a tag in iOS is what Apple calls a framework. Krux does have an iOS SDK, and we do have fast-moving publisher clients who are now making these moves to synchronize mobile users and sell mobile online audience packages using exactly this kind of technique.

We have the data collection that can serve this. Once you have a logged-in user tied to an email, you’re off to the races.

Given the smaller screen size and the restrictions around mobile, should publishers be worried about this move to mobile? It seems to me that yield is about to get compressed in a big way. Is there a bright side to mobile for publishers?

The industry figures are pretty clear in this regard. Monetization of mobile is just terrible.

You can run, but you can’t hide. Mobile is going to be everywhere, right?  The value tilts much more towards publishers who can use data, because you don’t have that many opportunities to engage with a user to dazzle and intrigue them on a much smaller screen. Publishers will want to start using data in a much more intelligent way to power mobile opportunities, given that dynamic.

Follow Tom Chavez (@tommychavez), Krux (@kruxdigital), (@adexchanger) on Twitter.


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