Omar Tawakol is CEO of BlueKai, an online data exchange. Tawakol recently discussed his company' strategic direction with AdExchanger.com.
AdExchanger.com: Looking at the new website, it seems BlueKai’s business is evolving? Can you touch on how?
OT: BlueKai’s business is constantly evolving to respond to new demands that we see in the industry but we continue to build on the core asset of our business, which is our data exchange, anchored by our intent data. Our new website aims at helping people visualize the continued growth in scale of our intent data. Beyond intent data, our buyers can now access upper funnel audience data from our exchange through partnerships with companies like Acxiom, BIZO, DataLogix and Lotame. (some only available through BlueKai.) Finally, the same platform that supports the BlueKai Exchange is now available to marketers and agencies as a private solution to managing their first and third party assets. We have seen significant growth and activity in the platform side of our business.
It feels like BlueKai has been focusing on the demand-side opportunity to-date. What about the publisher side? Are they increasingly looking for data solutions?
As an exchange, BlueKai’s priority is to create a healthy data economy that is fueled by quality data access and active data demand. Having quality data publishers is the key to this. Our entire business is founded on providing the best yield for publishers of data – so yes I would say we have always had a focus on data publishers.
From your viewpoint, what do publishers care about in terms of their data?
Data control is number 1 – who can access it, at what price, at what level of granularity. Yield is number 2 – how do I make the MOST money from my data at the best price without cannibalizing other revenue opportunities. User impact and privacy is number 3 – how do I minimize the impact to the user experience (i.e. site load times) and how do I do this in an open, transparent, privacy-safe matter.
Can you drill down on Control? What does that mean?
Control has many forms. The first form of control is to understand your own data asset by classifying it in a way that your business thinks. That way you can then decide to lock, privately share or publicly share any type of data. The second form of control is price. You might want to control how the data is priced (sell by cookie, sell by impression use, sell a subscription). You shouldn’t have to treat your entire data asset the same way. Some attributes you might keep to yourself – others you might share selectively and yet others might be listed in an exchange. You might even want the ability to mix and match your own data asset with additional 3rd party sources. That is why we separate our BlueKai Platform product from the BlueKai Exchange. Many people use us to control their data asset without selling any of it in the exchange. In fact some of our largest sellers do both – they share some and keep some for their own use.
And, yield? This seems to be the basis of any publisher interest – “how much am I going to make?”
At the end of the day our data publishers want more money. But they want to know that the check they are receiving will grow and that it will grow in a way that doesn’t hand out the crown jewels. So yield is about getting the best price for every bit of data. Auctions are great at that. An auction can allow multiple pricing models but in the end the auction drives the best price through liquidity. We believe we are one of the few (or maybe ONLY) auctions where the price of good data rises with competition. It will produce better checks today and it will set the publisher up for even better checks tomorrow without commoditizing your data asset.
So, is data worth more than media? And, how does that relate to yield?
Yes, we think good data is worth more than the average impression. But the problem is that historically, publishers with good data were not compensated on the quality of their data so they were not incented to participate. If you sold diamonds for $10,000 and a ring seller asked you to give him your diamond on consignment so that he could sell $300 ring-diamond packages for a 30% rev share – what would you say? No way! We know data drives targeting performance (think about layering on re-targeting data on RON impressions) and that over time if you let the market pay for value – the creators of good data will get the best possible yield.
Many people would argue that an exchange isn’t the best way to drive yield – that a yield manager should yield manage multiple exchanges.
You don’t yield manage an efficient marketplace. In other words you don’t list the stock of Apple on both NASDAQ and NYSE with a yield manager on top of it. You can’t get a better price on a luxury good by not listing it on ebay, but instead listing it on three, small, non-ebay auctions. The best way to yield manage is to place your goods in the largest most efficient marketplace.
What is your target market in terms of publishers today? Everyone – long tail, fat tail, etc.?
A BlueKai intent data provider is a publisher who has very valuable audience data. That is VERY different than someone who has lots of impressions like the classic web impression publishers. Our intent data providers are high value data publishers like commerce sites, research sites, and creators of highly niche audiences. We generally skew to larger commerce publishers with quality brands but we have begun to diversify into the mid-tail. For these publishers we are the best at protecting their assets. Don’t confuse this with a classic publisher who is afraid that people are cherry picking their asset. In fact, this fear couldn’t be more unfounded - publishers that leverage a unified data platform like BlueKai’s are far better equipped to protect their assets and guard against data leakage than publishers without one.
What are you suggesting to publishers and ecommerce sites about data collection and protecting the user experience?
There are two completely different approaches to reducing the site impact of data collection. We are executing on both. The first technique is to allow standard pixel data collection but to limit and control how data is collected; the second is to eliminate pixeling from happening on the site itself.
And the second approach sounds like some of the pixel-free solutions?
Our approach to eliminate pixels is to move the buy side to buying data through server-to-server integrations. That way all data queries can happen server side. This is similar to the RTB integrations. The way it works is that BlueKai will id-swap with most the major data buyers, networks, DSPs, portals, etc. We then have a map of IDs from all interesting consumers and all interesting buyers. Once we have that – we can eliminate buy-side pixels altogether. Our APIs are integrated into dozens of the largest buy-side platforms. By next year, the vast majority of data buying will happen that way.
How are you addressing privacy concerns these days?
We have a very simple idea here. Every page that collects data should have a link at the bottom of the page which says “About Advertising” or “About Data Collection”. This page should then have simple, short English about what is happening (not legalese). Finally, that page should link to a transparency tool which shows the types of data that are collected. BlueKai has a white label transparency tool. Google and Yahoo have transparency tools – we don’t care who you link to. Without full transparency, it isn’t fair to ask a consumer to trade free content for targeted ads.
Do you think it will someday make sense to merge all of these privacy tools from different companies into one for the consumer?
Yes, I think that is definitely something that would make sense for consumers. However, while the industry gets on board with the idea of a consolidated preference tool, I think it is imperative for companies like BlueKai and Better Advertising, and Google to lead the charge. We are laying a lot of the groundwork for what a preference tool should be for the consumer, but it will take organizations like the NAI or IAB to establish central platform for the industry. (much like what the NAI has done for one-step opt out.)