As companies stop just talking about big data, and start applying it to business, the conversation shifts back and forth from tools to the data itself. Two years ago at Structure: Data we hosted a Mapping Session on data markets that pointed out a lot of missing pieces in that particular business model. Then, tech vendors were trying to blend Hadoop, analytics, and publicly available data sets into random pools of information.
We thought they were missing out by not focusing on industry-specific objectives, and learning lessons from established database businesses like LexisNexis, Nielsen, or Standard & Poor’s. These days, tools-plus-data combinations are proliferating. Marketing and advertising tech is a particularly fertile hotbed.
No DMPs without data?
The marketing-tech arms race between big CRM players like Oracle, Salesforce.com, and IBM as they compete with Adobe and digital ad tech specialists is, if anything, accelerating. If Oracle really spent over $1.2 billion on consumer data aggregator Datalogix – my sources say Oracle outbid Nielsen rather than Facebook – that would be three times more than it reportedly spent a year ago on BlueKai, which makes a data management platform (DMP) as well as a data market. Is the data worth more than the tools? To a software company?
Bear with me. Madison Avenue jargon is just as dense as that of Silicon Valley, and probably less familiar. A DMP can act as the management and analysis hub for marketing and advertising, and is a critical part of the marketing tech suites or platforms often branded as “marketing clouds.”
Gigaom Research analysis shows that DMPs are important because they fit between a company’s own customer data and third-party sources – the known and unknown customers, the data for both deterministic and probabilistic algorithms. Although they mostly originated in support of display advertising, DMPs will act as a bridge across different digital (email, display ads, search) and traditional (TV, print, direct mail) marketing channels, and across the complete range of marketing objectives: awareness, acquisition, conversion, and retention.
Piecing it together
Last week, I talked to two smaller exemplars of the tools-plus-data philosophy.
Manhattan-based eXelate calls its combination of DMP, analytics, and data marketplace a “customer data cloud.” Its marketplace really is one; that is, its value is in the aggregation of other third-party data sources that it re-licenses directly to marketers but also to other tools companies like DMP providers Turn and Rocket Fuel. EXelate’s trick is licensing data from just about everyone. It claims 200+ sources including offline consumer experts like Alliant, Datalogix, MasterCard, Nielsen, TNS, and Neustar (which also makes a DMP and marketing-tech platform).
While eXelate offers information on business professionals, including IT, finance and small business through its data-as-a-service B2Bx product, much of its data is oriented toward consumer marketers and advertisers. It’s putting together what it calls a closed-loop, near real-time service for measuring the effectiveness and ROI of campaigns for the auto industry in conjunction with J.D. Power. Consumer packaged goods and travel are next on the list.
San Francisco-based Radius focuses on B2B marketers, especially those trying to reach small business buyers. As such, its data and tools combination is geared to email, direct mail, and telemarketing, with a half nod towards Twitter and Facebook. Its “marketing intelligence platform” brings mostly proprietary, but also third-party data into its customers’ CRM databases to help them identify new prospects and optimize campaigns.
Years ago, Radius hired human beings to validate the huge index of digital signals – mostly from proprietary crawling and government data – that it interprets to identify prospective buyers. Radius’ analytics tools incorporate this data as needed for marketers, with a clever pricing/bundling scheme. When they’re using their own first-party CRM or sales data users don’t incur a charge, otherwise they draw down on credits that are appended to their licensing fee. Many of Radius’ customers are using Salesforce and Marketo, and that’s where it has done most of its own integration work.
Bringing along readily usable data to a marketing platform makes infinite sense. Plug-and-play solutions could help cut through what is still a confusing landscape of marketing-tech offerings. Ongoing consolidation still hasn’t cleared up the notorious LUMAscape. Even the biggest companies need to make use of anonymized data for privacy reasons. And it’s a hassle for midsize companies to maintain multiple licensing relationships.
Radius’ proprietary data may present a higher competitive barrier to entry for other would-be DMP-plus-data merchants than eXelate’s third-party strategy. But eXelate has a pretty smart pricing strategy of its own, where it translates its bulk licensing deals into a fixed cost for marketers but a CPM or usage-based variable one for DMP resellers.