DataXu CEO Baker Discusses Company’s Cross-Channel, Demand-Side Platform Update

DataXu announced the next update to its demand-side platform known as DX2 which the company says, “measures, buys, and optimizes ad placements across online, video and mobile display channels, on a real time, impression-by-impression basis.” Read the release.

CEO Mike Baker of demand-side platform DataXu discussed the new update to the company’s media buying platform.

AdExchanger.com: What are the big differences in this new update to the platform and the previous version?

DataXu is the first DSP technology to move beyond online display advertising.  Like consumers, our new platform — DX2 — spans across other media channels such as mobile and video.   At the urging of our big brand customers, we also added a level of brand control not found in ad exchanges, including page level content targeting, brand safety filters, and demographic targeting at the user level.  Last but not least, we added a deceptively simple “self serve” interface that automates the laborious manual workflow required by other DSPs.  As all business owners know, great ROI requires good performance with lean staff operating costs.

How does the DataXu platform address creative?  Any thoughts on how the platform can help creative agencies, creative directors, etc.?

DataXu includes creative optimization in the core decision and bidding process.   We all know that the most effective advertising incorporates good decisions about the audience, creative and context.  What I find strange is that the ad tech industry has created multiple start ups myopically chipping away at each of these domains, as if they were discrete silos.  No wonder agencies are so confused!  We believe in “global optimality” — consider all of the data and decision domains when you value each impression.  Don’t guess, base each decision on the data generated from your brand’s prior placements.

Back to your question … creative agencies stand to benefit tremendously from the new wave of ad decision technologies.  Our recently published research suggests that creative is actually more important than audience and context in predicting conversions.  And this is true even for the much maligned banner ad!  The challenge for creative agencies, however, is to understand and engage with the new technology.  Figure out how to leverage it.  I can certainly understand why some cop out and vilify it instead.

What’s your view on audience buying today? How do you recommend a marketer “audience buys” through DataXu?

Audience buying is widely accepted as an effective advertising approach and our platform supports audience buys of all stripes.  But let’s not confuse a tactic with a strategy.  The fact is that retargeting and audience buying doesn’t scale.  Why?  The available cookie lists aren’t big enough to support a major brand’s marketing objectives.  This is just the inherent limitation of cookie-based targeting … the scale/precision trade-off that characterizes all precision ad-targeting techniques.  We work around this constraint by learning the most effective combinations of creative and context within a defined audience segment and applying the learnings more broadly across the internet, adjusting the purchase price as appropriate.

What’s the target market for DataXu today?

When we launched DataXu a year ago, we proved out our platform with direct marketers, who are very exacting in their measurement and ROI demands.  We’ve built a loyal customer base there.  We then moved “up the funnel” to large brands interested in improving the performance of their digital advertising.  And DX2 is aimed at large brand marketers that want to drive consumer awareness, consideration and engagement.  Advertisers can use the real-time bidding and ad exchanges for successful brand marketing.  That’s what DX2 is all about.

What about on the sell-side relationships? Is it important for the platform to have unique sell-side relationships in place to help differentiate?

We continue to focus on providing best-in-class technology to brands and their agencies.  Doing this right is all the differentiation we need to be a successful company.  We don’t take an ownership position in media or data.  Unlike our competitors, we are a technology company, not an ad network, not an agency, not a hybrid, not a Trojan Horse.

What do you see as the overall impact of rich media units, expandables, etc. on the real-time biddable marketplaces in the next year? Why should marketers care?

Our big brand customers love the ROI and insights they get from buying exchanged-traded media through DataXu, but they are asking for more engaging media than is found on today’s online display ad exchanges.  That includes expandables, video, and richer in-banner media, across channels.  In particular, verticals like CPG that are rotating a lot more budget into digital want a richer digital palette to drive purchase intent for offline purchases.

Can you share any numbers and that reflect the deal flow you’re seeing for the DataXu platform today?

I can’t.  But I can tell you that this is the first company I’ve been involved in that has had to upwardly revise its revenue goals twice in the first 10 months after launch!  We’re in hyper growth mode.

Do you see the platform as a full-service solution only? Is a self-service component possible?

With the launch of DX2, we now offer both full and self-service options based on our customer’s needs.  Indeed, we have agency customers who use the platform successfully today.  We offer our self-service customers basic and advanced “what you need to succeed” training, service level agreements, advanced analytics assistance, and so on. Even the most sophisticated agencies are struggling mightily to understand this brave new world of data driven advertising; so it’s not enough to just hand them they keys to a powerful technology platform.

By John Ebbert