October 4, 2016

Salesforce Augments Data Management Offerings By Acquiring Krux

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Salesforce is buying another company, and this time it’s Krux, a data management platform.

Krux tracks traffic, i.e., user behavior, across devices and channels, so it enables advertisers to market to people through video, display, and search on both smartphones and desktops. Technically, it works for tablets, too, but is that really important?

During its independent years, Krux had only raised a modest $50 million in funding — though it did have a client base of over 200 companies. But Salesforce isn’t buying Krux for its clients; it’s buying Krux to strengthen the advertising data management capabilities of the Salesforce Marketing Cloud.

Despite the growth of ad blocking technology, advertising technology remains an important area for digital marketing, and since some of Salesforce’s closest competitors already offer data management capabilities in their products, it’s inevitable Salesforce would make more acquisitions to compete.

Right Data, Wrong Time?

What’s most interesting about this acquisition is whether or not buying Krux was a smart move by Salesforce. Most data management platforms (DMPs) rely on cookies to track the way people behave online and deliver ads to them on various devices and channels.

While cookies are the default for digital advertising platforms, they have their limitations, particularly on mobile. In fact, Google debuted ad tech at this year’s Advertising Week that focuses on “logged-in” data, or data from gathered from users once they login to a platform.

This type of data is widely considered more complete, because it allows for more detailed targeting. Where cookies power advertising based on demographics, a logged-in campaign can take a list of emails from a CRM and either advertise directly to those people, or target new customers who match the profiles of the uploaded segment.

Google may have unveiled technology that uses this method last week, and Facebook has been doing this type of thing since 2012 with their Custom Audiences ads.

So, is Salesforce’s acquisition of Krux a mistake? Not really.

Logged-in data may be preferable to cookies, but it’s not like Salesforce has a platform that consumers log into, like Facebook and Google. Also, any kind of data management or data gathering tool Salesforce can get its hands on has substantial value, since it can help power the new Einstein AI platform.

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Image credit: Dion Hinchcliffe via CC