DataXu Opens Black Boxes, Launches Marketplace For Ad Algorithms
by Joe Mandese, May 22, 2013, 8:48 AM
In a push to demystify the black box world of programmatic trading, a major ad technology developer is creating a marketplace where advertisers, agencies and trading desks can shop for algorithms. The so-called Algorithm Marketplace, which is being launched today by demand-side platform DataXu, will start with a couple of dozen off-the-shelf algorithms developed either for DataXu’s internal operations or for specific clients, but will add new ones -- about a dozen a year -- over time, CEO Mike Baker tells RTM Daily.
“It’s kind of a paradigm bender,” he says, “because up until now, most ad tech companies have claimed to have a secret, proprietary algorithm. We think it’s time to open the curtain and let advertisers understand what’s behind it.”
Baker says the goal of the new marketplace is twofold. On the one hand, he says it is intended to demystify the largely opaque perception of the algorithmic processing that powers most of the real-time decisions that enable programmatic media trading. On the other hand, he hopes it will be a lead generator for DataXu to resell proven technology it has already developed for others, and to attract new customers to create new, customized programming for their specific business needs. As part of the Algorithm Marketplace, DataXu will also offer customized solutions, he said, because different brands operating in different categories may have unique needs.
That said, he believes an algorithm created for a marketer in one category -- say, an automobile marketer optimizing test drive offers to online users -- may have applications for brands in other categories.
“Algorithms are just a really fancy word for codifying your business rules with computer programming that can automate the processes,” he says. “The real goal should be to help brands solve their business problems by using advertising more efficiently.”
Baker says DataXu considered making the Algorithm Marketplace a true exchange that is open to other ad technology developers -- but decided to keep it in-house, because it couldn’t guarantee “quality control” for the programming developed by other vendors.
Marketers or agencies utilizing the marketplace will pay a licensing fee based on DataXu’s software-as-service model.