Performance Economy #4. M32 Connect turns complex pricing into revenue wins

Eren Koont
by Eren Koont LinkedIn
Jun 22, 2020 1:46:00 PM

Following on previous spotlights on businesses that are using automation and other digital innovations to deliver greater customer value, we’re excited to feature M32 Connect—an AdTech and analytics company that helps publishers maximize the revenue they get from their digital ad assets using a proprietary, machine learning–driven SaaS platform.

Check out these other Performance Economy spotlights:

  • [24]7.ai – Uses Artificial Intelligence (AI), combined with human intelligence, to deliver customer acquisition and engagement products across nine industries
  • Clerk.io Develops tools for online retailers that automate time-consuming processes while delivering a personalized shopping experience for consumers and an incredible 20x ROI guarantee for retailers
  • LevaData Offers a SaaS platform that leverages AI and data-driven tools to optimize the procurement process, using data and outcome-based pricing to guarantee 10–30% incremental cost savings

 

What is the “performance economy” and how does it work in today’s competitive marketplace?

Today’s performance economy is defined by customers who demand value for what they’re paying for and want to see and feel that value in the performance delivered through the service.

It takes innovations in workflow automation, AI, including machine learning and automation, to keep the performance economy working at top efficiency. Why? Because such technologies allow IT leaders to “manufacture time,” by systematizing administrative tasks (e.g., inputting contracts into billing systems; reconciling data between the CRM and accounting software; etc.) thereby freeing up business leaders’ time and energy to focus on higher-order, value-creating activities.

Performance-based pricing revolves around two common threads:

  • Transparent KPIs and industry benchmarks: Commonly understood metrics allow all parties to start with a shared definition of success.
  • Data measured in a clear and consistent fashion: Enables companies to easily use data as a meter. (Note: We’ve learned that any additional effort required to get at the data necessary to charge a customer reduces the chances that performance-based pricing will ultimately be successful.)

 

M32 Connect’s “platform of platforms” optimizes publisher’s monetization strategies

With dozens of years of combined experience in the intersections of media, advertising and technology, the thought-leaders behind M32 Connect recognized that present-day digital ad monetization models just aren’t sustainable over the long term. 

Fraught with deeply complex processes, very little transparency and too many disparate pricing models driving revenues down—not to mention increasing ad fraud and data security issues—the programmatic ad market had become overly complicated. What’s more, most of the funds being invested in AdTech in the sector only served to improve the ad buyer’s relative negotiating power, to the detriment of ad sellers’ revenues.

With this in mind, industry experts Mo. Kahlain and Claude Cajolet of M32 Connect set out to deliver a different monetization framework for the programmatic media sector. They launched their turnkey, SaaS “platform of platforms” in 2018 with three main goal: 

  • To help digital publishers understand, control and optimize their audience and campaign data and the various monetization sources and formats available to them from across the programmatic ecosystem; 
  • To enable publishers to make better business decisions on the placement of their advertising assets; 
  • To create a more egalitarian model that better balances the needs of advertisers with the revenue potential embedded in the programmatic advertising market. 

Said Kahlain, co-founder at M32 Connect, “We’re not trying to be a Google or a Facebook. We’re entering an era where there’s a place for new players to make it easy for business leaders to make decisions. And that’s not by building another platform… it’s more important to figure out how we can integrate all of this wisdom and knowledge that already exists. That’s why we built M32—to offer a ‘platform of platforms’ that leverages the strength of every innovation that’s happening, for the benefit of our clients.”

M32 Connect harnesses the power of automation in three customer-facing modules, to provide a holistic view of the revenue that publishers can earn from their digital advertising assets. 

m32-dikw-1-800pxThe platform is inspired by the DIKW pyramid, where data is merely an input and the ultimate objective is to turn the combination of audience and campaign Data points, market Information and Knowledge-based insights into strategic, intelligence-based business decisions (i.e., Wisdom; see diagram). 

Module 1 – M32 Revenues aggregates all available and relevant data points into a full-functionality, global overview that allows publishers to track monetization trends over time.

M32 Module-800px

Module 2 – M32 Segments is a modernized version of the programmatic industry’s data management platforms (DMPs). M32 Connect’s version helps publishers to collect and organize first-, second- and third-party audience data into highly actionable audience segments.  

M32 Module 2 segment report-800pxM32 Module 2 create a segment800px

Finally, the company’s upcoming module release—M32 Intell—provides visibility into how each publishers’ benchmarks measure up against the marketplace as a whole. This is in contrast to most of today’s programmatic platforms, which focus more on individual publisher KPIs and tend not to provide the holistic, market-wide view that can help to drive more strategic pricing decisions.

Machine learning innovation propels more successful—and egalitarian—programmatic ad monetization

The performance economy is driven by companies who want to see the value they’re receiving from their investments. With so much competition in the market, businesses realize that they no longer have to work with any given product or service provider. Rather, they can act more strategically, enlisting the expertise of service providers to massage and organize the data, insights and transparent KPIs to understand what they’re trying to achieve and how well their products and services are performing against those objectives. 

“The problem isn’t lack of data,” observed Kahlain. “With data coming from multiple sources and multiple environments (and each structured differently), it’s our job to work all of that data, to make it useful as a factor or input to get to the knowledge and insights. That’s why we leverage machine learning—to leverage multiple data inputs at the same time in order to derive insights that push the ad industry forward.”

Data + Information + Knowledge = Intelligence is a valuable equation for M32 Connect and their customers

In the ever-evolving programmatic ad sector, Kahlain suggests that a hybrid monetization model—adapted from the Software-as-a-Service (SaaS) pricing model of years past—works best for all parties involved. “Product and service providers cannot survive by putting together forecasts based purely on variable [performance-based] compensation; that wouldn’t be fair to the companies that are bringing innovation to the market, and it’s not fair to the service provider, because they end up taking on all of the risk. Instead, I think the ideal model is a hybrid set-up, where a minimum fee covers basic business needs (and is low enough that you eliminate friction), topped with variable revenue derived from cost-based, data consumption or actual revenue generated. That’s the future of the performance economy but also the innovation economy.” 

With their sights set on expanding the functionality of their “platform of platforms” in the coming months, M32 Connect will continue to use data automation and innovation to guide publishers to the best and most profitable environments for their advertising assets—pushing the boundaries of programmatic ad monetization for the good of the industry as a whole.



 

Topics: SaaS, transactions, performance economy, Adtech

 

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