WPP Acquires Crystal Semantics: Hedging Bets Given Demise Of The Cookie, Or Is Content Truly King?

After firsthand experience selling Crystal Semantics’ core technology while working with European-based Ad Pepper Media a few years ago, I can say the technology’s ability to analyze page-level content was impressive and well-received by a number of agencies and brands.  However, its biggest limitation was simple:it required significant scale and a programmatic-buying platform to unlock the full value. 

Operating through an ad network model, Crystal Semantics was largely limited to a combination of manual targeting and optimizations; good but by no means RTB and without the algorithmic muscle of a platform on par with Xaxis to drive impression-level buying. Pairing Xaxis with Crystal Semantics should unlock the technology’s true potential and provide lift for Xaxis clients. 

Digging into the technology: the ability to scan a page and properly understand its top themes or semantic categories is no simple feat (almost everyone has seen or heard horror stories about misplaced ads or “negative adjacency” due to keyword targeting).  Xaxis will be able to digest page-level data against billions of impressions, feeding results into its buying platform to better understand how editorial content impacts consumer engagement.  Some may argue that IAB category data is available through ad exchanges today but this is directional at best, as inventory is typically classified by the sites themselves.  A second benefit Xaxis will see in understanding the content of a page is recognizing potentially “bad” content (i.e. adult, alcohol, tobacco, etc).  Companies such as Double Verify and Integral Ad Science have built businesses focused on the ability to snuff out offensive content. 



In addition to the above, this acquisition is also interesting as holding companies and their respective agency trading desks have typically opted to license their ad tech stack components, not directly investing in technology for a multitude of reasons (not a core competency, cash flow, conflict of interest, etc). Of course WPP is already an exception given the fact it acquired 24/7 Media in 2007. Perhaps this is a harbinger of many smaller bite-size acquisitions to come as the lines between digital agencies and technology companies continues to blur. 

Finally, should consumers and the government give the ad tech industry the proverbial Heisman with regards to tracking and behavioral targeting (a stretch, but possible) then WPP’s ROI on the Crystal Semantics acquisition is magnified significantly as content -- and the ability to understand its relationship with consumer engagement -- will indeed be king.

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