MediaMath announced it was spinning out its US service business into a new agency so it can focus on its core tech offering. Here Erich Wasserman, Co-Founder & GM EMEA, MediaMath, discusses the Kepler agency spin off, what it means for MediaMath's business and how it helps global clients.
Can you give some overview on the rationale behind this strategic move?
Kepler Group is an independent business born out of a recognition that MediaMath needs to focus on what it’s excellent at: building technology for marketing professionals that grows our clients’ businesses. Particularly in the US market, we found ourselves in the strategy and consulting role more and more, and so we made the decision to spin off that practice. This enables both businesses to focus on what they are best at. While we are a minority investor in Kepler, it will be operate independently from MediaMath. We strongly believe in its leadership and are excited to be an investor.
Is this a pivot in MediaMath’s business?
It’s been said that strategy is what you don’t do. This is not so much a pivot as it is a recognition that with focus comes great product. We provide technology that agencies use to drive results for their brands. But, we also had some great clients that didn't work with an agency, yet still wanted to use MediaMath technology. With Kepler, the line is a lot more clearly drawn between technology and a consulting-style analytics business.
How do you think this will play out in agency land? Should agencies be worried about this new strategy?
Not at all. MediaMath views this move as an opportunity to focus more deeply on building technology. We think the position agencies should be worried about are those companies that provide both technology and services that ultimately compete with the agency that partners with them. Working with MediaMath is now an easier decision.
Is this an attempt to put clear blue water between the tech and service business?
That’s right. MediaMath will continue its focus on technology creation and empowering our clients with the tools they need to adopt.
Do you think pure play ad tech plays should just focus on tech rather than getting involved in the service business?
I'd say so, yes. But when we started the DSP business it was in the early days of this ecosystem when it was difficult not to offer services -- the technology was so new. Now that the landscape has matured and buyers are far more up to speed on how to use platforms like MediaMath's TerminalOne, it's a lot easier to just focus on tech.
Will you have the same kind of relationship with Kepler, as you do with Spree7 in Europe? And are we likely to see more of these arrangements globally?
MediaMath invests in multiple technology and media companies and receives investments from them as well. We are always looking for interesting ways to expand the businesss.
Sometimes, this takes the form of outright investment of cash or ownership, or, in the case of Spree7, a joint venture focusing on the DACH region out of headquarters in Berlin.