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The commercial media just went shopping.
On Thursday, ecommerce marketing company Rokt bought customer data platform mParticle for $300 million.
Word to the wise, “Rokt” is pronounced “rocked”, not “rocket”, just FYI.
Although press release is framing the deal as a merger with Rokt investing in mParticle, Rokt taking a 100% stake in the company, Rokt co-founder and CEO Bruce Buchanan told AdExchanger.
Deal structure wording aside, Rokt’s acquisition of mParticle comes somewhat out of left field because why does it need a CDP?
Particles and particles
Almost exactly a year ago, Rokt acquired AfterSell, a post-purchase customer experience and upselling service for Shopify merchants. This deal makes perfect sense as Rokt displays ads and offers on retailer and media subscription sites after purchase.
But in this case, the reason is more the merger of two companies that serve a similar market and the improvement of Rokta’s services in e-commerce marketing beyond advertising, which Buchanan says is actually a minority of the company’s revenue.
More than 90% of Rokt and mParticle’s respective client bases are enterprise retailers and brands that spend more than $5 million annually on each company’s software. In cases where their clients overlap, Buchanan said Rokt’s performance has increased by up to 50% compared to other CDP or identity solutions.
One reason for the better performance is better match rates, but there’s more to it, said Michael Katz, co-founder and CEO of mParticle, who will remain in the role after the acquisition. Retailers who work with Rokt and mParticle also use them for post-purchase retention marketing and to grow their loyalty or credit card program.
What’s attractive about mParticle is that it’s a live data source, Buchanan said. Rokt only has a moment—the time between making a purchase and loading a confirmation or checkout page—to understand who they are and what potential offers or upsells they might consider.
RIP to CDP?
The CDP category has undergone extensive consolidation over the past few years.
Oracle, Salesforce, Twilio and other big players have acquired point solutions. And in the past month alone, two other major independent CDP vendors have been acquired: ActionIQ bought Uniphore and Lytics moved to Contentstack.
When mParticle was first launched, the moniker CDP didn’t exist yet. “Everyone is a CDP these days,” Katz said.
For mParticle to continue its mission as a customer data platform, he added, it needs to “get closer to the value creation layer.”
One of the challenges for CDPs, according to Buchanan, is that the investment in data services and integrations is hard to justify for a software solution that isn’t directly involved in ad targeting, attribution or bidding decisions. CDPs typically remain an unbiased resource at a level independent of these services.
“In order to fund the investment you want,” he said, “you have to be close to the source of value and realize what really matters.”
And Rokt knows very well the value big brands place on data that could convert customers in the moment.
“Let’s not get too hung up on the category name and whether people need to register for the category name,” Buchanan said. “We know that mParticle creates a unique result because of their real-time capabilities.”
This is the third ad tech acquisition this week. On Monday, T-Mobile bought a digital out-of-home company View media and The Trade Desk bought an ad tech metadata startup Candid.