DataXu Doubles Down on Service

DataXu is branching into Europe with the acquisition of fellow demand side platform Mexad. But the move is also a sign of the importance DSPs place on service.

DataXu CEO Mike Baker, when asked why DataXu would need another tech company, pointed out that 35-employee Mexad’s greatest benefit to DataXu is its service component and customer relationships in the United Kingdom, France, Italy, Germany and markets in Latin America.

“We want to be an enterprise technology company,” said Baker. “This is about building out an enterprise services team.”

The not-so-dirty secret about many DSPs is they’re heavily in the services business. They often don’t talk about that part of their business, since as venture-backed companies they want the much higher sales multiple typically tied to scalable tech businesses. Yet for many DSPs, services are the bulk of their business, as agencies rely on them to manage the buying process. In this way, it can be hard to tell how what they’re doing is that different from an ad network.

Baker believes the services bent of many DSPs is tied to the adoption cycle of programmatic buying. Thanks to agency trading desks, the buy side is starting to get more sophisticated with operating DSP technology, he said. It doesn’t mean DSPs will want to become like agencies, although some are heavily involved in providing what certainly look like agency services.

The price of the transaction was not disclosed. Baker said DataXu now has 120 people.

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