Why AUDIENCES Is Redefining The Data Stack & Unleashing The Power Of Brand 1PD
Greetings and salutations, readers. There has been a wee bit of a hiatus on the newsletter output due to travel, conferences, and fundraising activity (Fund 2 launch). But FPC is back on it - and raring to go. Over the past few weeks, you will have likely seen all the chat from Cannes. AI is the new obsession. And rightly so - but for different reasons.
In this brief preamble, we will crystallise all the closed-door convos from insiders into a narrative that will arm you for those upcoming strategic meetings. Ad tech is poised for a significant transformation on so many fronts.
FPC has never seen so many micro and macro trends converge at the same time - from AI to US trade policy, to changing consumer behaviour, to business model evolution, to ad tech supply chain friction. We are conveniently compartmentalising this utter chaos into three memorable buckets: 1) AI, 2) data and 3) outcomes-based technology. We have, of course, invented a new acronym for this new narrative: ADO (pronounced "ay-doh"). We will expand on this at a future date.
In this edition, we will focus only on the data bucket. As you are aware, FPC has made significant investments in signal and data distribution startups - an investment thesis that will continue into Fund 2. We are increasingly seeing the data distribution piece move from legacy third-party offerings to native cloud solutions. Databricks and Snowflake are now the obvious platforms for ad tech to build on.
How Cloud-Native Platform, AUDIENCES, Activates 1PD At Scale
Only 3% of media buys are informed by 1PD. It is the greatest signal of them all. However, brands are often unable to utilise this data to its fullest extent. The reasons are myriad, including (arguably the most significant impediment) privacy.
Right now, it is very difficult to onboard that first-party data in a safe, efficient, and privacy-first manner.
AUDIENCES is a new breed of real-time data company built directly into the brand’s data stack.
It enables brands to manage and onboard their own first-party data at scale - unbundling core capabilities from costly feature-heavy data stacks and giving power back to marketers within their organisation.
Rob McLaughlin, CEO and Co-founder of AUDIENCES, joined us on the recent edition of The FPC Podcast to discuss AUDIENCES and how it works directly with brands and agencies.
AUDIENCES will be our first investment from Fund 2. We are also making this available to individual investors through our syndicate. The link to the deal is listed below. Given the company's trajectory, it is likely to be oversubscribed within a matter of weeks.
AUDIENCES syndicate deal: https://investors.firstpartycapital.com/deal/detail/3c00c066-140f-4036-bbe0-05261a9a558d
FPC has outlined 7 reasons why it is making a fairly substantial investment in AUDIENCES (see below).
Now you might be wondering what is AUDIENCES? Is it a CDP? DMP? An onboarding solution? These are good questions. To understand more, FPC has put together a handy visual overview of the AUDIENCES solution (see below). Two additional use cases are missing from the sketch below: lookalike modelling and targeting.
Those 7 reasons why FPC is investing in AUDIENCES:
Only 3% of media buys are informed by first-party data. Audiences is an app within the marketer stack (Snowflake, Databricks et al.) that enables marketers to use their first-party data at scale. It’s a beautifully elegant solution to a massive issue in marketing: how to use 1PD effectively.
Audiences enables marketers to query and segment first-party data in real time, removing the bottleneck of going through internal technical teams. This empowers marketers to use their valuable 1PD.
It disrupts the uber-expensive CDP model, giving marketers a composable and inexpensive solution that enables them to build real-time segments and onboard across multiple channels (open internet, Google, Meta, Amazon, TikTok and more).
Audiences is the pick of a new crop of real-time data (RTD) platforms built on cloud technology. Traditional segments are updated infrequently (daily or weekly, if that). Real-time data enabled by the Audiences platform allows instant campaign adjustments, reducing wasted impressions and increasing relevance. This is hugely important for brands that need to maintain up-to-date and accurate exclusion lists.
It is a privacy-first solution. Since no PIl data leaves the advertiser's infrastructure, this approach poses zero risk to data privacy or security. Marketers love it, as do the DPOs.
The company makes £1 million in ARR and has sticky SaaS contracts. Its upside is enormous, as it expands the business. The company has a strong and ambitious management team that is looking to build this company into a significant ecosystem player. Audiences will become the go-to onboarding partner for marketers.
EIS cover on this deal for UK investors. Tax rebates are available on this raise.
The investment is now live on the syndicate platform. Get investing.
It’s going to be a mad Summer, followed by a mad Q4, looking forward to the ride. Have a great ad tech day.