Tom Chavez is Founder of Krux Digital.
AdExchanger.com: How is this platform addressing data leakage (see Chavez recent opinion piece) unlike other publisher-side platforms?
TC: We believe that publishers need to solve the data protection problem before they plunge into data management and monetization. Obviously data leakage and data collection have been getting a lot of press lately. Regardless of what unfolds in the press, Congress or the FTC, all the publishers we're talking to already have a clear interest in demonstrating responsible stewardship of consumer data. The first part of our platform, Data Sentry, detects who's grabbing data on a publisher's site – what we refer to as a 'collector,' who's ushering in those collectors – we call those guys 'ushers,' how much data collection is occurring, across which sections, audiences, and channels, with the ability to drill into individual pixels, individual collectors, individual ushers. Because of the variety of browser and HTML standards out there, identifying how collectors and ushers chain themselves together and reliably measuring data leakage at scale turns out to be really hard.
Beyond the privacy issue, which is a biggie, it's clear that publishers who leak data are leaking money. So Data Sentry offers a KPI on the revenue exposure from unauthorized data collection. By measuring the opportunity cost from data leakage in this way, our Data Sentry adopters can start to recapture lost revenue one nickel at a time.
Finally, there's latency. As all those rogue pixels accumulate on a publisher's site, it takes longer and longer for their pages to load. That's a bad thing for the user in any context, but now that Google and Bing are moving to factor page load times into their rankings, it also degrades the publisher's traffic from search referrals. So publishers have a basic operational need to clean up their pages and manage down the overpixelation that's going on. Data Sentry helps them do that by measuring the latency impact from individual pixels, ushers, and collectors.
How will the demand-side benefit from and interact with the Krux Digital platform?
There will be mostly winners, and perhaps a few naysayers. Demand-side players are frustrated right now because they're showing up with fancy RTB interfaces, but there's no real-time handshake back from the supply side. To energize their campaigns, they need real-time, intelligent access and supply liquidity, which is exactly what we're enabling for publishers. They need access to data that is actionable, market-ready, and responsibly collected. Dirty data is our industry's blood diamonds, and nobody wants to be in the business of trading it. The naysayers could be the demand-side networks who have built zero COGS businesses premised on skimming publisher's audience data and reselling it to others or arbitraging it against cheap media. I think they'll be in the minority – in fact most of the demand-side players I've been talking to are eager to establish new rules of the road for data usage, and we're committed to helping both supply and demand sides design and implement those protocols.
Gotta ask: "Krux Digital" - what's the reason for the name?
That's an easy one. In the earlier idea stages, as my cofounder, Vivek Vaidya, and I sat around the kitchen table framing the business, we kept finding ourselves saying, “Data is the crux of the matter." The choice of 'Krux' quickly became obvious. Moreover, I'm a sucker for four-letter company names, and we like the way the 'K' and the 'X' hang together in our logo.
What is the pricing model for the platform? Can you discuss a use case on how the platform works?
We have a simple, metered pricing model that scales with the number of services adopted by the publisher and the volume of data flowing through our platform, which corresponds pretty naturally to the publisher's size and scope. More data, more usage means that the publisher pays more.
Publishers prefer free services, free technology – who doesn't? But free technology over the last several years has come at pretty heavy cost for the publisher, specifically the erosion of their data and media assets and their disintermediation from advertisers. In some sense we're betting that publishers are ready to turn the tide and start investing in infrastructure again. It'll be interesting to see how this all plays out.
What do you see as points of differentiation with other publisher side platforms?
There are at least three key differences between our platform and everything else we see out there right now. First, we're just data. To date publisher-side platforms have handled ads, not data. They focus on delivering, forecasting, trafficking, optimizing, planning, verifying, or analyzing ads. We think that as media is increasingly decoupled from data and as the overall digital media market hurtles towards real-time, there's a pressing need for publisher technology that brings exclusive, aggressive focus to data. I've spent the better part of the last decade in ad-centric publisher infrastructure, and it's clear to me that the challenges of capturing, stewarding, managing, moving, optimizing, tracking, and settling the exchange of data in a responsible, scalable manner require new systems, new algorithms, new thinking. It's big and hairy, and it's going to keep us busy for a long time.
Second, we're infrastructure, not an intermediary. In the data sphere, while there are certain players addressing different aspects, they typically center on exchange, network, or broker models. We're maniacally committed to offering a neutral platform, to never taking a principal position on media or data, and to not making any end runs on our publishers with their own advertisers.
Third, our platform is powered by the algorithmic intelligence we think scalable data management really requires. This isn't just about matching cookies and delivering packets. It's an exercise, ultimately, in real-time pricing, classification and segmentation, market design, and market clearing. We like our prospects when it comes to these sorts of challenges -- for better or worse, my co-Founder, Vivek Vaidya, our team, and I really enjoy chasing them and wrestling them to the ground.
What about funding for the company? Anything you can reveal? How many employees today?
We have a small team right now of eight, moving quickly to nine, and I hope not to exceed 12 for the first many months. Howard Charney, a serial entrepreneur, Cisco SVP, and long-term mentor of mine, and Mike Galgon, the Founder of aQuantive and a brilliant internet strategist, led our Series A and have joined our Board. While we're grateful for the venture interest we're receiving, right now we have all the funding we need to prove our model, ship products, and delight our early customers. Having run this drill before, I feel I understand the absolute importance of not over-capitalizing a company. We're going to maintain our discipline in this and all ways during the months ahead.
What's the roll-out schedule? Is it widely available today?
Data Sentry is in market and available today. We'll be announcing plans for the rollout of our additional data management services in the September/October timeframe.
How is the platform uniquely addressing concerns around consumer privacy while still managing and monetizing publisher datasets?
We're committed to helping publishers with management and then monetization, in that order, and that's the thrust of the follow-on announcements we'll be making later this year. But again, our view is that website operators need to attack the data protection issue first. It's the right thing for their business, consumers, regulators, legislators – everyone.
Data protection, in my view, lies at the intersection of the two Venn bubbles of consumer privacy and publisher monetization. You can't monetize an asset over which you don't assert full ownership and control and that's being pilfered one speckle at a time. So, in addition to just wanting to do the right thing in terms of consumer privacy, publishers have a natural business incentive to protect their data.
I just don't believe that the FTC or Congress seek to suppress free enterprise or to annihilate media businesses that have been premised for hundreds of years building and engaging with audiences. Internet media makes consumer data a much more charged issue, largely because technology enables too many hangers-on to know arguably too much about me while trying to use that information to get a slice of the action. But it'd be a mistake to throw out the baby with the bath water. If you have a website and you see someone harvesting data from your audience activities, you're aware of it and even getting compensated for it, and the data itself is managed responsibly and collected in a way that's clearly communicated to consumers – well, that's free enterprise. Ultimately, once we figure out supporting market mechanisms for it, the consumer should start to get compensated for their data as well.
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