DataXu launched Tuesday what CEO Mike Baker calls the next generation of demand side platform (DSP) technology that lets advertisers measure, buy, and optimize ad placements across online, video and mobile display channels in real-time, impression by impression.
The platform -- DX2, which added mobile and video -- makes more than one million media decisions in a second to deliver advertisers deeper consumer insights and media control. It's about understanding consumer behavior and recognizing patterns through three screens. The technology also features pull technology rather than push.
Baker -- who sold Enpocket, a mobile ad platform, to Nokia in 2007, allowing it to build an advertising network -- believes mobile and video will create the next wave of efficiencies for advertisers. He says the first generation of DSPs approached the bid world as if they were paid-click optimization engines from search engine optimization (SEO) companies, relying on cookies to serve up the ads.
DSPs have become known as the disruptive intermediaries, but as online advertising moves deeper into technology it will take technologists, or techarketers, rather than traditional marketers, to support online advertising through automation and data gathering.
DX2 makes decisions with data beyond cookies in real-time such as time of day, geographic location, day of the week and other data that reveal performance patterns. "The industry relies on cookies, cookies and more cookies, as if browser cookies define the limits of intelligent decisioning," Baker says. "We look at all the data related to ad placement, including cookies, but also page content and creative perimeters that correlate to conversions."
The back-end platform that allows DX2 to provide precise ad placement looks a lot like Google, according to Baker. Through Apache Hadoop, an open-source parallel processing technology, and commodity hardware, DataXu crunches ad and Web data for advertisers looking for statistical probabilities. The data is processed daily for 30 days.
DX2 manages multichannel campaigns with access to more than 100 billion auction media impressions across online display, mobile and video channels. The platform integrates with Nexage and Mobclix for mobile inventory, and adap.tv and BrightRoll for video inventory. Mobile and video beta programs will run through 2010.
The platform offers a real-time survey tool in partnership with Vizu that identifies the creatives, the consumers and the content that produces the best brand lift. Baker claims the platform dramatically lowers the cost of ownership because advertisers don't need to purchase as much data.
A recent DataXu MarketPlus company newsletter digs into the cost of media associated with these new tactics. The chart shows cost on a CPM basis for Optimized "Run-of-Exchange," Audience Targeting and Retargeting indexed to Run-of-Exchange cost.
The tremendous amounts of data are filtered through machine learning technology. Baker says DataXu's team -- literally a group of Massachusetts Institute of Technology (MIT) rocket scientists -- filters information from data, turning the info into insights and actionable. The data is not achieved.