On Sept 15, four months after funding, Boston-based and 2009 TechCrunch50 finalist DataXu Inc. has emerged from stealth mode. Co-founded in 2007 by MIT aeronautics and engineering professor Edward Crawley and former Technology Review president and CEO R. Bruce Journey, DataXu also sports Mike Baker, former head of Enpocket Inc. and Nokia Interactive as its CEO. Atlas Venture’s Jeff Fagnan and Flybridge Capital Partner’s Jeff Bussgang are on the board. In April, the company took $6 million in funding from Atlas and Flybridge.
DataXu provides the industry’s first real-time optimization analytics software for online ad campaigns. The bid management system is a cross-exchange platform connecting to the major ad exchanges — AdMeld, AppNexus, Google/Doubleclick Ad Exchange, PubMatic, and Yahoo/Right Media. The platform implements campaigns based on KPI, budget, creative or prior campaign data. Using advanced machine learning technology developed at MIT, it creates and evolves brand and campaign-specific algorithms and predicts which impressions will likely yield specific actions on web sites. The platform enables advertisers to measure, analyze and optimize their digital media across multiple ad exchanges simultaneously. They can bid-manage and buy individual ad impressions, making real-time decisions on each ad opportunity as they occur.
DataXu expects to deliver higher ROI to its clients, helping them monetize each impression, and realize higher eCPMs for more valuable impressions that would otherwise be sold in lower value tiers if more traditional media approaches were used. The platform is expected to increase display ad buying efficiency as it factors in conversion rates, pricing, and other data that identifies the inventory that best matches the advertising. DataXu ‘s business model is structured so that it gets paid on a CPM basis, similar to an ad server, but gets a percentage on the lift.
It’s clear that agencies will now be able to align their strategies with data-driven decisioning, which is becoming key in the rapidly evolving ad marketplace. Advanced data analytics are also critical to value and buy online advertising going forward, as the industry moves to real time bidding. Agencies have been developing their own ad planning and buying systems in order to avoid being displaced by online ad networks and exchanges, and media-buying analysis platforms like DataXu are now offering solutions. But DataXu offers real-time analysis, which will become increasingly critical.
DataXu’s first customer is Havas Digital, a Spanish firm managing seven interactive agencies. Havas selected DataXu for its ability to measure, analyze and optimize campaigns at the impression-level, in real-time, and on a global scale.