DataXu

SANDRO CATANZARO: My name is Sandro Catanzaro. I head analytics and innovation for DataXu. What we do at DataXu is help marketers reach their consumers in a most efficient way, and also gather data as they reach consumers to analyze the consumer behavior.

We do that using leveraging tools such as big data and the newest digital technologies to create those insights in near real time. As a difference, back in the past when an advertiser, a marketer, wanted to learn about the newest trends in the market, they would have some focus groups, some surveys, and those take many days to actually create results and provide the insight. Nowadays, they can have insight the next day. And at the same time, while they use our technology, back in the day they will create a plan mostly by hand. Nowadays, with our technology, it's completely automated, and they can save between 20% and 30% of their marketing investments.

For example, a large telecom company in the UK-- we have offices in Europe and here in the US-- this telecom company in the UK is using our technology, and they have realized that by doing following the advice and the insight out of the platform, they can save about 14 million pounds in investments. Or they can create 100,000 more customers in a year, which is pretty impressive.

The company was established in 2007. The [INAUDIBLE] needs of the company is technology we developed at MIT within the aeronautics and astronautics department. And what we did back then was help NASA to understand what was the best way to get to Mars with humans safely and bring them back.

In 2007, we incorporated the company. During the last part of 2007 and 2008, we refined the value proposition. We got funded Series A in 2009, and we opened our initial, first office in London in 2010. And by 2011, we have offices in five different cities in the US and five cities in Europe.

Nowadays, we are 320 people. We have clients in Europe, here in the US, and we just a year and a half ago opened the Singapore office for the APAC area. What we really like is that we have the opportunity to work with many blue chip companies. We're talking the likes of Ford, General Mills, Lexus to help them realize their goals and to co-innovate with him. Many of the newest ideas we have that have been applied in the platform came from business needs from our customers that we tried to adapt the platform to address, and that has created many of the newest programs we have.

Most of my life in the past, my background, has always been in entrepreneurship. So this is, in fact, for me startup number six. I for a short period of time worked for a larger company. I was doing management consulting for Bain and Company, but most of my life it was bringing something from the napkin to the big company, and I like that type of challenge.

I have always been linked to entrepreneurship, and at some point I thought, OK, my background is mechanical engineering-- that's my undergrad-- but my [INAUDIBLE] information management wasn't as strong. So I thought, OK, I'll try to get some more business information management information, and I came to study to the business school, Sloan. Actually it's a mixed degree between the engineering school and the Solan school. It's the SDM program, System Design and Management.

And as I was doing that, I also started taking courses in the aeronautics and astronautics department, and eventually got a second masters from the aero-astro department. And back in the day, I thought I am coming to MIT to get a business information, and in some ways astronautics was an indulgence. It was a bit something I was doing because it was fun.

I didn't realize at that point that it was that that was going to be the basis for this wonderful business we have created. MIT, the combination between the best management and the best science, is what makes it truly, truly special. You have people who are super smart in the science, but also super smart in management, and they can together bring to life a value proposition that is very scientifically sound but also makes a lot of sense in terms of business. So that makes the whole difference for me.

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SANDRO CATANZARO: Our typical client is a business-to-consumer company that has marketing investments. And they'd like to either acquire more customers or increase their goals with a client-- their present personal customers. In general, when you think of acquiring more customers, you can focus either on volume of customers, or on quality. You know, you may want to acquire a specific segment that has better [INAUDIBLE].

But in typical client for us-- is a blue chip company that will have a sizable market investment. And they want to, on the one hand, do it very efficiently and, on the other hand, learn about those marketing investments, what trends consumers care about. Is it important for consumers news? Is important the value proposition about the seat belt? Or is it the one about the infotainment system?

You are talking about a bank. Is it important to have a card with points and discounts and miles? Or is it about a mortgage or is it about lower interest rates? But what we care about, and we can provide that the insight back to them.

So, in general, these people who are forward-looking and people who are trying to innovate and be more efficient.

So our experience has been working with very senior people at different organizations, different companies. And once they see that this is really not a dream, it's a reality, that this is doable and it works-- it works at scale, it's cost efficient-- it's not only that they believe in it. They embrace it because it's making their dream and their fantasy they had when probably they started in the business a reality. Right?

Now, you can launch a TV campaign in 10 days, and you can target to specific households. Well, that was a dream. Now, it's a reality, and it happens and you can get reporting of those. A TV campaign, how many cars it sold or how many credit cards it sold. In 10 more days, household by household. Again, that was a dream. Now it's possible. Right.

So we see people who were more experienced or have been working in the old ways seeing it, seeing the reality of it, and saying, wow, I must do it. It's not that I want to do it or I like to do it. I must. It's just an imperative.

In general, we have a strong attraction in several industry verticals. We're probably the most expert company in automotive, the automotive vertical. Almost all the automotive manufacturers, the OEMs, and their agencies have worked with us. And their needs tend to be not exactly alike because every company has a different strategy, but there seemed to be some alignment in the way they go to market.

In terms of on other verticals we work with, we have the telecom vertical. We have retailing, the financial industry as well. And you tend to see some patterns that repeat.

For example, in many cases, advertisers want to execute budgets at the very local level. They have a certain amount of budget for a specific geographic location and a different budget for another location. So they want to be able to manage those budgets, and that cuts across all industries. It seems to be a common problem and a common situation. We're dealing with it, you know?

In general, we also see a spectrum of clients. Some clients are more forward-looking and are more willing to innovate. And other clients want to see that technology is proven before committing to using it. But in general, we see that, in many cases, it repeats-- the need from one client to the next.

Measuring return on investment on marketing is a common problem to almost everybody. So, in that sense, we tried to think about solutions that we can apply to different places. Obviously, without losing sight of trends of a specific industry, like the automotive market, where we can have a strong expertise.

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SANDRO CATANZARO: The company started initially with a simple execution through showing ads in computers, banner ads. That was called DSP, Demand Side Platform. We eventually expanded to mobile ads, video ads, social apps for Facebook and Twitter, and more recently, we are working very strongly with TV ads.

The other section that's also getting a lot of traction from our clients is our ability to use the platform to measure marketing return on investment. So now they can know for every dollar they invest how many dollars are they getting back and which is the point at which they have saturated the market, too much money in marketing, and which they have to kind of pull back and invest that money somewhere else.

So when a consumer is seeing an ad in their cell phone, what's happening is that cell phone is saying, well, right now this consumer is seeing content that is interesting to them and willing to pay for that content, so let's create an ad, and let's have actually Ford pay for the content.

So they will call our system, they will say, well, there is a user with an ID which is totally anonymous, 1, 2, 3. And that user wants to see an ad. And we're going to select from the library of ads we have, which is the most effective ad to show in that moment for that customer. The full transaction happens in probably less than 20 milliseconds.

So to the consumer, there is no difference, but for the advertiser it's important because now, if that consumer was interested in buying a compact, they're showing them an ad for a compact car.

Same thing in TV. Maybe that consumer has been browsing the newest F-150. Aluminum box, awesome truck. Now, are we going to show them the ad for the compact or for that newest truck in TV? Well, you can show them the relevant ad. That consumer is probably going to be more motivated, is going to be more informed.

Our product, because it was born out of a decision platform which was originally used to decide how to get to Mars, it's a very generic framework to decide on the value of something. In that sense, for us, was relatively easy to adapt it, initially going from banners in websites, extended to videos, mobile ads, and social ads. So for us, it was a very natural extension of what we are doing initially to expand to these other channels.

In some ways, you can think of our solution as providing the value or showing an ad to a consumer for creating a forecast what is the likelihood of that consumer doing something about that ad. Whether that ad is a banner, is a mobile ad, is a video ad showing in your cellphone, or it's an ad shown through TV, for us it's not that important. As long as you can forecast this probability, and can understand what is the outcome, the value of the outcome-- somebody's buying a car, what is the outcome-- if you can multiply those two, you know what is the value of that specific ad.

So in a nutshell, that's what we do, forecasting probabilities. And in that sense, one channel or another is just ways to reach consumers.

This split of media [? ways ?] and the different channels that there are have spun a need to create a way to join all these different identities that consumers may have as they travel through their life-- they have an identity in their phone, an identity in the desktop, and different identity in the house-- to match them and understand what is the behavior of a consumer as they go through life. So by using this technology, it possible for us to learn whether some ads were more effective than others and be able to talk with consumers in a way that is not intrusive, respects privacy because it's completely anonymous, but at the same time helps the advertiser achieve their marketing goals.

So you can see over time, the total advertising pressure to drop, however, you're going to still receive the messages that inspire you to buy certain products. And so, in one hand, you are going to reduce the clutter, you're going to reduce those ads that shoot you over and over, you know, and actually waste money. And you're going to see a much more harmonious experience for the consumer. You know, you're going to see an ad in the morning, another ad in the afternoon, and maybe that's it. That's just enough, and that fulfills the goal of the advertiser.

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SANDRO CATANZARO: When we came into the market, to be completely honest, very naive as out of [INAUDIBLE] we thought we were going to create the perfect machine. And the perfect machine was going to help people to just sit and relax. And it's going to help them decide.

And we created this platform. And it was pretty effective doing what it's supposed to do, doing the [INAUDIBLE]. Some of our competitors have similar offerings. And at some point, we find ourselves that as we were innovating, all other competitors were having similar ideas.

I think what has made us a bit different is to try to go a step further, one, two, and three times, to continue innovating all the time, and continue working with our advertisers, and people who are working in marketing, very much experts in marketing, and have real daily problems that they need to address. And we have continued innovating and creating solutions for them.

So I mean, our competitors have very respectable companies, I believe. But still, I think our edge has been to continuously innovate and provide new solutions and being on the real kind of cutting edge of what it's possible to do in terms of technology, at the same time respecting always the privacy of the consumer. We are very much aware that with the consumer, there is a mutual understanding. We cannot step on them, because otherwise, it's going to be a short game.

We are here in the industry to create a company that's going to be robust over the many years to the future. Some of the hurdles we have to overcome to sell our services and our products is people in the past were used to a very specific way to go about marketing. And in general, they were very interested-- I mean, they may not have had the expertise to operate these type of platforms, because they didn't exist.

And the other challenge you could think is not everybody has the dedication to think in the time frames that these platforms can provide to you, the insight. So the fact that some platform can tell you tonight you actually should change your [? value ?] [? proposition ?] may not have been something people were ready to use. So among the hurdles that people have to overcome were to have the right talent to come into the companies to operate the platforms, and also have the right people who can use the type of advice this platform would provide.

But we have seen many companies being super successful, that actually these begin a transformation for them in the fact that enables them to be much closer to the process of how do they find ways to reach consumers. And by being closer to the consumer, be much more reactive than other competitors. So in some ways, companies that work with us, while it requires some changes internally, at the same time, those changes are beneficial in themselves, because that allows them to be really, really close to what the consumer thinks.

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