For its part, IgnitionOne raised more than $85 million since 2013, and the company is folding its chances of a DSP exit beyond the deal with Zeta. The partnership does ease IgnitionOne’s annual costs, however, and provides access to Zeta’s data cloud as part of the deal, improving campaign performance for IgnitionOne’s managed media practice without it having to buy data from other sources.
So, why does Zeta want yet another DSP business when the market simply didn’t pan out for many ambitious early players?
Zeta has been pitching programmatic companies on its approach, Steinberg said, which entails those companies ditching their own inefficient or unprofitable DSPs to run on Zeta’s technology, or to sell off part of the company as part of a larger partnership with its marketing cloud.
Zeta doesn’t have to worry about the high product development investment required to run a DSP, because it has much deeper pockets than programmatic vendors. According to Steinberg, most of Zeta’s revenue comes from software licenses for its data cloud, not the media business, which accounts for less than 10%. This means the company gets value from the DSP as a way to distribute its core data cloud assets even if the media-buying tech isn’t lucrative.
Taking over DSP market share via partnership and/or acquisition is also not as disruptive a process as when other marketing clouds bought their way into new categories, Steinberg said. The painful digestion of new companies by cloud giants like Salesforce and Oracle come about because those clouds need to kludge large, disconnected code bases into one cohesive product.
“With every deal we’ve done we’ve sunset the tech and migrated customers to our stack,” Steinberg said. “We’re not cobbling stuff together.”