Today, DataXu announced that it has acquired demand-side platform (DSP) Mexad, which has its headquarters in Germany as well as offices in France, Spain, the United Kingdom, Italy, Poland, and Brazil. Dataxu said in a press release that it hopes to globally expand the use of its DX3 digital ad platform with brand advertisers. Read more. Terms of the deal were not disclosed.
DataXu CEO Mike Baker discussed the acquisition and its implications.
AdExchanger.com: What were some of the triggers for this acquisition? Global expansion?
MB: Exactly. That's the first bit for us. We've spent a lot of money, time and R&D on building a super‑scalable technology platform. And that's always been our approach to the market. Our DX3 [platform] is an example of what our product does and the perspective we're taking in the market. Now it's about expanding, and driving more traffic and business across the platform.
How does this acquisition contribute to the integrated stack that DataXu envisions?
That's the second thing. They help us attain the winning formula. We're realizing that in order to drive this as an enterprise solution, we need to have an enterprise service. For instance, we need database integrations with clients across multiple databases and countries. If you don't understand how to do an aspect of what we do, like the data management piece or doing a customized attribution model, we're going to actually put that person on site and help you do it. In that sense, it's like any enterprise services business. There's actually a fairly large amount of heavy lifting to be done in doing deployments and integrations. For example, we need to make sure that 35 people across these six territories are all trained and deployed in the same way they are in the US. The best technology and service is the winning combo. That's what customers have told us and we're responding to that.
What do we like about Mexad? First of all, they're very strong in Germany and the UK. As we all know, Germany is an important economy to the overall European Union, and one that's typically less penetrated by American companies. They all go to London and work the Anglo connection. I did that with Enpocket before. I'm familiar with London and we're working there. But, I'm really pleased to be working with somebody who's in Germany and brings connections to that economy. When you talk to their customers, they have a high customer satisfaction rate. Mexad is not a technology company so we're pleased to be buying something that's financially successful, while not paying a dime for technology because we're not a group who needs to buy that.
All I know is if I was going to be an agency, I wouldn't have spent as much money as I have on R&D, patent portfolios and everything else. There are a couple of questions within the question you're asking. First of all, is there a need to redefine and revamp what the Agency Of Record (AOR) does to have stronger data and analytics capability? Absolutely. I wrote in ClickZ as to how to do it. A couple people called me and thanked me for the good ideas. But that's not [DataXu’s] destiny because God didn't put me on Earth to run an agency. What we are doing requires local service people to manage the complexity of big deployments. When we buy a data warehouse, we have three service people on site for six months. When you work with IBM, you work with them because they've got the systems. Unica - or whatever the product or hardware or software is - they're putting the whole thing together to work for you.
Here's the real issue. The enterprise - everybody knows it has to evolve. What I call the “native digital state” where data and analytics is the “coin of the realm.” You've got a data core to everything you're doing.
So, "People, Process, Product," right? Of all the "P" problems - and I hear this from senior agency people and senior brands - the biggest one is probably People. I likened this to e‑commerce in the late '90s. Remember Scient, Viant, Sapient and all those guys? Nobody knew how to build a website. Now people do. Now e‑business is just part of business. We're on the cusp of this new way of working.
The first wave was the agencies hiring people to do it for them. Now the agencies are taking platforms. That's the second wave. The third wave is not only are the agencies taking platforms, but brands, too. What we're missing, though, is expertise. We need service expertise to use these new tools and platforms for the agencies and brands to cross the chasm into this native data‑driven-decision world. That's part of what we're trying to solve. We're saying, "This will accelerate the market if we can just give these guys a complete solution." It's important to note since I see people posting on AdExchanger.com that DSPs are ad networks. You buy DataXu technology for a technology fee. Anybody in the world can buy our technology by paying us a technology fee so it is completely available self‑service to the user with a login. There's no ambiguity around that. It is what it is. If you want DataXu service, we have a separate service fee, but they're billed independently. That's how an enterprise technology company sells its wares.
How about some milestones? What would you like to see out of this acquisition a year from now.
A year from now, we hope to be servicing global brands across territories - successfully and on a worldwide basis.
By John Ebbert