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June 18, 2013, Article

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Kepler Group Has Doubled Clients One Year After Spinoff From MediaMath

Link to original AdExchanger article

It's been a little more than a year since Kepler Group was spun off (see AdExchanger's Q&A) from MediaMath, where it had previously been the direct-to-client professional services group. So how's it going for the world's first independent agency to be incubated within a demand-side platform?

Not bad at all.

Kepler is hiring up and winning accounts. At its founding in May 2012, it had six staff, all former MediaMath employees, who serviced nine clients. It now employs 16, and has doubled its customer base to 18 accounts.

That growth is possible because traditional media agencies are moving too slowly on the audience-buying trend, according to CEO Rick Greenberg. "You've got this confluence of forces everyone's aware of," he said. "The agency/advertiser model hasn't evolved quickly enough, particularly at the traditional agencies."

MediaMath is, of course, Kepler's DSP of choice for bidding and optimization of display, as well as its pixeling hub / data management platform. Kepler also supports channels outside display through partnerships with ad buying platforms (Marin Software for search, TubeMogul for video, Salesforce/Buddy for social). And it's also buying direct, non-biddable ads. In other words, it's a full-service digital agency.

"If you're not going multi-channel, you're a point solution," said Greenberg.

Kepler is going after consulting budgets too, helping customers create integrated media plans rooted in data – think attribution and media mix modeling — with media execution thrown into the bargain. Its revenue model is a hybrid of percentage of media spend (for media clients) and professional services fees (for consulting clients).

One of Kepler's newer customers is stock photo giant Getty Images. Getty has relied on Kepler since October 2012 to support three data-driven media functions: regression analysis, customer segmentation, and setting ROI thresholds.

"We're pretty young in our relationship," said Grant Reid, Getty's group online marketing director. "We work them pretty hard, I make no bones about that. At the same time we expect them to challenge us. It's a collaborative approach, and we view that as a way forward."

In the segmenting area, Getty's online marketing is focused on attracting more "gold" and "silver" customers, that is, big spenders on stock photography. "We couldn't do that without the analysis Kepler has brought," according to Reid.

Getty uses Kepler for display and retargeting only, eschewing the other channels it offers, preferring to source ad tech directly.

Reid said Kepler's true strength lies in back-end data mining, including competitive analysis. He calls Kepler's abilities in this area "second to none" and expects the relationship to last.

"The data is getting richer, and heavier, and more difficult to lift," he said. "In the past we've moved around a little too much between agencies. As the relationship evolves, there's more data to be had, a richer set we can refer to."

While Kepler CEO Greenberg came to his role through MediaMath, his background is in media services including at Rosetta and Unilever. Running the MediaMath services group for direct clients such as Kayak, he says he saw an opportunity to leapfrog traditional agencies and their nascent budgets for programmatic spend.

But Kepler doesn't see itself as a direct competitor to trading desks at the agency holding company level, working in conjunction with large media agencies. An example might be a CPG marketer that wants one agency to manage 20 brands.

"There's still a very logical and plausible story there," said Greenberg. "We're not geared to do this. We do work with very large corporations that have lots of brands, but we work with one division, or we'll work with the Center of Excellence."

Kepler Group is a major buyer of "programmatic premium" inventory. According to Jay Sears, GM of Rubicon's Revv Buyer, it has been a leading adopter of Rubicon's Connect direct deal automation on behalf its advertisers. That's striking when you consider the volume of spend flowing through holding company trading desks.

"It's one small example of how we're not mired in the traditional approaches. We're able to use the full potential of the tech stack," Greenberg said.

Greenberg said sourcing talent is among his big challenges as Kepler scales up.

"We're looking for a specific type of person. Good with unstructured problem solving, good on their feet, and can marry different parts of product strategy in tech and analytics.

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