After a year of listening, Spotify is able to create a personal Top 100 for a user, who can then show off his or her good taste in music. What if an advertising client wanted to offer something like that for its customers?
It’s the general idea of what might be possible after the Winston-Salem advertising agency The Variable last week acquired Data Crunch, an analytics and artificial intelligence company based in Raleigh.
“Someone on the back end does the data analytics, writes the algorithms, creates the branded experience that then spits out your 100 that looks nice and is visually appealing, that you can then share out with the world, which creates a lot of awareness and talk value for Spotify, draws more people into listening, draws more people into explore and maybe getting a subscription,” said David Mullen, CEO and co-founding partner of The Variable.
The deal grew out of The Variable’s assessment done every few years of where the industry is going and gaps that clients will have. One is clarity about business and marketing decisions, which comes from not only data but also the ability to make it understandable and meaningful, and to anticipate new business applications using it all, Mullen said.
Looming big was artificial intelligence and the possibility of creating new intellectual property for clients – something like personalized Spotify Top 100 lists.
“It became pretty clear to us that advanced analytics would be really important in things like understanding business intelligence, financial modeling, predictive modeling. … It also became clear that we would need to help clients understand and leverage the real application of AI,” Mullen said.
“And we felt like that was a pretty good roadmap, as we looked ahead for the next three to five years on the areas where we felt like clients would need help, and where we could add a new capability that would significantly leapfrog not just where we've been, but where our competitors often are.”
The two organizations began working together on some client projects about eight months ago, and The Variable met with more than a dozen companies in analytics looking for the right partner. What stood out, Mullen said, was Data Crunch people talked broadly beyond just how they could pull off specific projects, even though they were not directly in marketing or advertising.
“What we liked about these guys is, as we talked about a business opportunity or a business challenge, they were business thinkers who helped us think about … what about this type of solution would answer this kind of question. They were thinking partners, not just analyzing and building partners.”
Data Crunch has 20 employees, with several in Raleigh and the rest around the country and world, as it began all-remote. It was founded in 2019 by Curtis Seare and Ryan Nokes. James Thomas is vice president of data engineering.
The Variable has 114 on staff, making it among the largest ad agencies in the Triad. Among its clients are NAPA Auto Parts, Electrolux, Frigidaire, Procter & Gamble, Nestle, CharBroil grills and BASF in Raleigh. It has twice been named small agency of the year by Advertising Age magazine.
Joe Parrish is The Variable’s co-founder and chief creative officer, and Jodi Heelan is CFO.
Mullen declined to reveal terms of the merger.