Mike Baker of dataxu on How to Crush It in Converged TV

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Nine years ago, a group of data scientists from MIT Labs formed a partnership to more fully explore the use of data science in advertising and marketing.  From this, dataxu was born.  In those early days, however, it was difficult to get upper management at media companies to think beyond the standard datasets because the business model greatly relied on syndicated data research to track the business.  "Our starting premise was the idea that the world of media, marketing and advertising would benefit from data analytics and AI," explained Mike Baker (pictured above), Co-Founder and Chief Executive Officer of dataxu.  And his belief was well founded.  Today the use of data science, algorithms and multi-sourced datasets to track the media business has become, as he noted, "orthodox wisdom."

Dataxu focuses on the value of advanced television -- specifically connected TV -- to enable advertisers to understand and more fully and effectively reach precision audiences across all viewing devices.  Its work with agencies has not only accelerated the formation of true cross-platform planning and buying but helped to herald a new way of thinking among digital-only buyers:  that TV has immense value and, as it becomes more data driven, is a vital part of all media plans.

Baker recently talked with me about the issues and opportunities for agencies that want to embrace this area.

Charlene Weisler:  What type of company is leading the charge in advanced TV curiosity and adoption?

Mike Baker:  Mid-market agencies have gotten on board early with self-serve tools that offer them sophisticated data analysis.  The leaders among those agencies are investing aggressively and using technology -- seizing on connected TV, in particular, as an opportunity to grow a TV practice that they previously haven't had.  These self-serve tools are do-it-yourself processing interfaces for data analysis.  That's really powerful for a smaller agency that doesn't have a large traditional planning and buying department for TV.

The other leading group is direct-to-consumer companies, many of which have maxed out on Facebook and Google Search.  They are looking for new channels and new opportunities to bring their data-driven planning and buying to the richer palette of video and TV.  What they find appealing are the digital characteristics of connected TVs; the ability to immediately understand who is exposed to an ad and connect that to sales and to quickly understand return on ad spend.

Weisler:  What is the TV opportunity at large and what should every agency know, whether they are just getting started or currently immersed in Next Gen TV?

Baker:  There is a very dramatic transition happening among viewers as to how they're choosing to watch TV, which is increasingly on-demand and done typically through streaming.  We talk about connected TVs, which are the large TV screens, usually in the living room, and connected to a streaming device.  So, the first thing to note is that traditional linear TV audiences are declining.  That alone means that simply doing what you did last year will lead to a worse result for your client.

But there's also a huge new opportunity for agency business.  Video is the fastest growing part of the media and digital market.  The client problem is that viewer behavior is fragmented across mobile devices for short-form video and TVs for long-form, high-quality content.  So agencies that use advanced data analytics to plan, buy and measure video solve a big problem, and it immediately differentiates them from legacy players.  Clients have invested vast sums in DMPs to collect their first-party data, but without enhancement it's not useful for media.  Agencies have an opportunity to deliver greater value to their clients by using tools that enable cross-device audience planning, optimization and attribution.

Weisler:  How would you advise agencies that are just getting started?

Baker:  Most agencies aren't aware that you can target specific audiences on TV.  You can take cookie data or DMP data and translate that into streaming devices to port a digital audience over to dynamic ad insertion (DAI) in long-form TV content.  But you need a tool to help you with identity management that is privacy compliant.  Dataxu offers one, OneView, that has become one of the fastest growing parts of our business.  It's now possible to build precision audiences using digitally sourced behavioral data to plan and measure a TV campaign.

Agencies just getting started also need to know that there are many premium programming brands available.  The premium inventory on connected TVs -- those familiar top-tier programming names like NBC, Turner and Fox -- is available for purchase programmatically.  At dataxu we’ve created a special private marketplace directly with publishers to ensure that the volume is there for advertisers who want to buy on a spot basis.  This is incredibly easy to do compared to negotiating with a national network or even local scatter buys.

Weisler:  There has been a lot of buzz around LiveRamp's IdentityLink launch.  Can you explain it, and how it empowers digital and TV buyers across brands and agencies?

Baker:  IdentityLink lets brands and agencies target specific consumers in a privacy compliant manner with a high degree of confidence.  Dataxu's partnership with LiveRamp makes our Touchpoint technology the only demand-side platform that can translate those identities and execute them in [both] digital and TV without losing any of the audience size.  We're seeing a lot of advertiser interest, especially among retailers and financial services companies that have built extensive first-party databases.  Oftentimes these kinds of data-driven firms want to use their CRM files to build media audiences, whether that's on a one-to-one basis or as a seed for creating lookalike audiences.  For these advertisers, the ability to move from data to action with the LiveRamp/dataxu partnership is unique and powerful.  We look forward to seeing this initiative continue to scale in 2019.

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