For starters, the acquisition was for $100 million, a significant valuation in this industry. Also the respective core strengths of the companies were intriguing on their own. What could a combo between the two deliver? As it happened, it didn't take long to find out.
Beta Roll Out
Last month IDI began releasing the beta version of its data analytics platform idiCORE to select customers. It is built on cloud-based infrastructure and fueled by a massive data repository and proprietary linking technology.
It is both data and industry agnostic, but idiCORE's initial applications will be aimed at risk management industry. It will then move into other segments of the market, including government, financial services, law enforcement, insurance — and marketing and online ad placement.
In fact, when all of the various pieces are in place, the company expects to have a solution that will make online and mobile ad buying a (finally) optimized process for ad buyers by cutting through the fraud, waste and inefficiency.
To truly understand idiCORE's potential to tackle this very monumental challenge, a look back at these companies' achievements up to the time of the acquisition is in order.
A 120M Consumer Database
New York City-based Fluent is rich where it counts — that is, in detailed data provided voluntarily by consumers on a wide range of demographic, ethnographic, behavioral and meta-data attributes, thanks to its survey operations.
The company also reported approximately $126 million in revenue and approximately $20 million in earnings before interest, taxes, depreciation and amortization (EBITDA) over the trailing 12 months through the third quarter of 2015. While that doesn't make it rich, it does indicate that it's financially secure.
Fluent surveys more than 500,000 Americans a day, generating more than 5.6 million survey responses. As such, it has been able to build a detailed database of more than 120 million US consumers since it was founded in 2010.
This is the company's no-so-secret-sauce, Fluent CEO Ryan Schulke told CMSWire. "When you think about 'data' in general, it is transaction data that is collected during a consumer transaction such as a purchase. It is not always collected directly from the consumer."
But if Fluent's data is its secret sauce, its bread and butter is how it monetizes the data.
Companies across a number of different verticals buy the data from Fluent for various purposes. One example Schulke gave was Overstock.com, with whom Fluent worked with to assist with signups.
Fluent was able to flag the audience sets on Overstock that were indexing the highest, he explained. By audience sets, he means, for example, young married couples living in rental homes in an urban area or conversely singles living in a high-end condo. “We can then say, that ‘home owners are more likely to buy XYZ product than a renter, especially if they are between 30 and 40,” Schulke said.
Actually some of the secondary data set analysis is being made possible, or will be made possible this quarter, through IDI and its own store of data.
See, one of the reasons this acquisition was so complementary was the data the two companies had been collected. Fluent is all about unstructured data and IDI’s focus is on the so-called regulated data.
A Data Fusion Market Maker
Much of IDI's management were instrumental in previous lives in helping to build the data fusion market, a subset of big data, according to co-CEO Derek Dubner. Briefly, data fusion is the process of integrating multiple data and knowledge bases to create enhanced data. Or as Dubner explained IDI's variation of the process to CMSWire: "We aggregate unstructured data sets and fuse that data together and create a comprehensive picture of consumers to present."
If the name IDI is not familiar to you, its predecessor companies probably are.
Dubner was corporate counsel with Seisint, later acquired by LexisNexis. He was also general counsel and chief compliance officer of Naviant, which was acquired by Equifax. And then he was general counsel of TLO, which was eventually acquired by TransUnion. James Reilly, IDI's president and COO, was also part of TLO's executive management back in the day. And Ole Poulsen, IDI's Chief Science Officer was the primary systems architect of Accurint, which is now a LexisNexis offering, and TLOxp.
TransUnion et al are, of course, the repositories of such structured data as bankruptcies, liens, drivers' licenses, home purchases and so on.
One of the reasons IDI was formed was to focus on developing similar data and analytical processing engines, but for the marketing industry this time. "Our long-term goal was to build a platform that a Fortune 500 company could layer over their own data," Dubner said.
The plan was to build where it could and should, but also acquire strategically as well.
In October 2014 it acquired Interactive Data, which focused on a limited segment of the risk management industry and had data supplier contracts with all of the major credit bureaus in place. IDI used that as its platform to launch its sales organization and add additional products. Then came its acquisition of Fluent late last year, a deal in which Opko Health Chairman and CEO Phillip Frost participated by investing $40 million in preferred stock as financing for the transaction and joining IDI Board of Directors as vice chairman at closing.
IdiCORE is the start of a new era in data fusion for a number of industries, including marketing analytics, Dubner said.
"Core is the platform in which we will introduce additional data analytics for Fluent," he said.
Right now the company is in the process of selecting customers for a beta release for that vertical, which it expects to be out of the door in Q1.
Waste, Fraud in Online Ad Purchasing
And what problem will it address? Why, just the most frustrating problem in the ad industry: how to pick the best platform, the best venue, the best moment to place an ad where it will be seen by the most human viewers.
Wasted impressions, whether through fraud or just inaccurate data, is a big problem in the industry. The combo IDI-Fluent model will solve this, Fluent CEO Schulke said.
Remember the example about Overstock.com and how Fluent was able to identify the highest-yielding customers? It will repeat that, more or less, with the ad purchase process. “It’s all about finding the 1 percent most efficient paid ad placements,” he said.
Title image by Maciej Szlachta