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Eureka! with Daniel Heer (Zeotap)

The European CDP market is booming like never before. More and more companies are looking for ways to unify their data, personalise their services, and optimise their business results. Almost 10 years after founding his second venture, we sat down with Zeotap CEO Daniel Heer to discuss his vision on data and privacy, the complex role of authorities in data protection, and the sense and nonsense of Customer Data Platforms.

Daniel's Eureka! moment: 

Just like a car needs fuel to drive, AI needs data to predict an outcome. With the proliferation of IT, the smart web, wearables, etc., humanity will generate huge amounts of data in the next decade. If we make the effort of looking deeply into all that data and making the insights widely available, we can improve decision-making in all areas of life.

First things first: how did you get into data?

“I was 23 when my first business failed gloriously. I decided to finish my studies and then joined Vodafone Germany. My job was to identify all kinds of patterns in their consumer data, present them to the Board, and implement measures to improve Vodafone’s bottom line. After 5 years, I felt the urge to be an entrepreneur again. I quit my job, travelled to Berlin and worked for one year at a gaming startup. At that time, in 2013, I got the idea for Zeotap, which was basically a combination of my previous experiences gained at Vodafone and the startup.”

What motivated you to found Zeotap?

“As an entrepreneur, I wanted to leave a positive footprint and build something lasting, like a Siemens or General Electric. Specifically for Zeotap, given my background in telecom, the initial thesis was to help telecom companies capitalise on their data and collect consent transparently. Usually, their precious data is locked somewhere in the basement. We assisted them in accessing this data, unifying it across segments and monetising it to the fullest in a responsible, privacy compliant way.”

Before you launched your CDP in 2020, what were Zeotap’s main activities?

“Initially, the goal was to build an ID graph in the telecom network, similar to what Google or Facebook are doing. We basically matched different IDs per customer, always based on consent, then stitched together certain attributes to these IDs and expanded beyond. We started buying data from 120 different companies and unifying it. And here’s the thing: without realising it, we had developed our own CDP technology, we just weren’t using it like a CDP. In 2019, one of our clients said ‘why don’t you build an easy-to-use UI around your technology so marketeers can use it, and then load your data into that UI?’ The idea was so good that we did it. From then on, Zeotap was a real, but highly differentiated CDP business.”

How did the launch of Zeotap’s CDP impact your business?

“Literally everything changed. We did a full transition to a SaaS go-to-market and drastically changed our company culture too. The mindset is different, we onboarded new people and customers, finance teams evolved, and so on. Overall, I’d say we’ve changed quite well overnight. At the end of 2021, we already had substantial new revenue from our CDP business. Today, we serve about 70 customers across Europe, mostly enterprises. In retrospect, I think this CDP transition was the perfect move for Zeotap. It sounds smooth now, but it wasn’t at all back then. Change with humans is always difficult, but the juice was certainly worth the squeeze.”

What’s the most important benefit of a CDP?

“It depends on the use case. That’s why it’s crucial to be clear from the very beginning. Broadly speaking, I think there are 4 types of applications:

  • The typical paid media use case, where it’s all about budget spend optimisation on Facebook, Google, Instagram, and so on. These cases are quite easy to measure and achieve on a timeline. The benefit will be less costs or more customers.
  • Personalisation, on websites, apps, etc. These use cases tend to be more real-time in nature, so they’re a bit more sophisticated. The benefit is better CX, which will lead to more sales.
  • Everything around service, like chatbots or call centres. This usually leads to better service, reduced call centre budget cost, or reduced call length, because the agents have more info at their fingertips.
  • And finally, everything offline, for example a store agent having more info to better serve customers visiting the store.

In short, a CDP drives unified data views, which in turn boost personalisation and lead to either less costs or more revenue. No one buys a CDP for all the fancy charms, but to drive economic outcomes.”

On LinkedIn, you say that ‘CDP don’t have to be complicated’. What makes CDP so complex?

“It’s like a Swiss knife: you can make it endlessly complicated. Within the 4 broad applications I mentioned, you have multiple sub-use cases. If these aren’t conceptually sharp from the start, you’re lost. Add the inherent complexity of large companies with multiple teams, agendas and interests, and you’ll get why everyone has a different perception of what the use case to start with should be.

There’s also the typical phenomenon of people who want to position themselves in the company. They tend to start with complicated use cases, just for the sake of standing out, and then you end up having multiple integrations, security issues, and eventually you’re several months in the game, you bought a licence, you paid upfront like a typical SaaS, and there’s no outcome.

I say: let’s forget about all the fancy stuff and focus on the business outcome. Let’s prioritise use cases that don’t take 3 months. Let’s go through a heated workshop and come out with a use case that sounds too easy to do on paper but can actually be implemented within a few weeks. It’s about letting go of a certain piece of arrogance, both the supplier and customer. We need to focus on what actually makes sense for your individual situation, and think with a commercial mindset, not with a tech mindset.”

“A CDP is like a Swiss knife: in theory, you can make it endlessly complicated. The key is to ignore all the fancy charms and keep your eye on the intended business outcome.”

On LinkedIn, I read that you believe in ‘the goodness of data’ and aim to ‘create unity between data and privacy’. Could you elaborate on this vision?

“Nowadays, at least in Germany, data is very negatively biased. As soon as someone brings it up in a conversation, people will say stuff like ‘the government is watching us’. I believe this is due to a lack of education on the pros and cons of data. I’m not saying data is always great, of course bad actors can misuse it, but that applies to everything in life, right?

Let me give you an example: when I travel by Deutsche Bahn, I sometimes see a train guard manually counting how many people board the train. That’s ridiculous. Through triangulation, you can easily tell how many people travel from A to B. This will allow train operators to plan their schedules better. But then, people will say ‘I don’t want telecom companies to observe where I’m going’, even though their data is anonymised in a sample of tens of thousands of other customers. You literally have to put in no effort whatsoever, and you’ll get better service in return. I mean, what’s not to like? That’s not at all Zeotap’s business by the way, but it still makes sense.”

How can we overcome this aversion to data?

“I think there should be a more reflective discussion on data and privacy. At the end of the day, they don’t have to be opponents. It doesn’t have to be this traditional fight where one excludes the other. They can coexist in harmony, and that’s what we’re trying to achieve with Zeotap.”

“There’s a general lack of education on the pros and cons of data. We need a more reflective discussion to show people that data and privacy can coexist in harmony.”

When did that sense of privacy grow upon you?

“As an entrepreneur, my opinion is obviously biased. One, because entrepreneurs naturally have a higher appetite to use technology for good. I always accept all cookies because I want to see relevant ads. They’re there anyway, so I prefer the relevant ads to the annoying ones. Two, because I have a vested interest in this ecosystem.

Here is the crux: of course people want their data to be safe and protected, but maybe 1% of the population cares about the detailed, conceptual regulations. 99% just want to enjoy website content and don’t think too much about the cookie banner. It’s like buying a car: you don’t want to know every single detail in the contract, you just want to drive the car in a safe and comfortable way. For regulators, this is where it gets interesting: how do you take into account both groups, the 1% that knows, and the 99% that doesn’t, but nevertheless also needs to be protected?”

“Here is the crux: Of course people want their data to be safe and protected, but maybe 1% of the population cares about the detailed, conceptual regulations. 99% just want to enjoy website content and don’t think too much about the cookie banner.”

Do you think we’re making good progress in data protection and consumer privacy?

“On the one hand, regulation in Europe isn’t always optimal. For example, if I come back to a website 2 weeks after first visiting it, I have to give my consent for cookies again. To me, that doesn’t make any sense. There should be a way to effectively protect consumer data without requiring so much repetitive work.

On the other hand, companies are starting to realise that they have to collect data in a positive way to better engage with their customers. This results in situations where users are incentivised to share their data, for example, through a login wall from a publisher, in order to enjoy relevant content. This actually makes sense to me. Especially for industries that are usually separated from the consumer because there’s someone in between, like a dealer in the automotive industry or a retailer in CPG, it’s an excellent evolution that companies are using data to move closer to the consumer.”

How can governments contribute to a privacy-first online environment?

“It’s a super complex, multifaceted role. In today’s world, large enterprises all have lobbies to defend their specific interests. And these companies matter to the government, because they pay taxes. As the government, it’s your role to protect consumers, but this doesn’t just mean saying no to everything. On the contrary, you need to act on behalf of enterprises and allow them to prosper in the online environment. If you block everything and the consumer is part of an environment that has no chance whatsoever to develop itself, in the long run you’re deluding the consumer.”

“Essentially, the government needs to balance the interests of the consumer, who often doesn’t even know his own interest in the broader ecosystem, with those of companies and their role in the overall development of society. When these interests conflict, that’s where it gets challenging.”

What steps can the government take to realise this?

“Ideally, and I know I’ll sound like a Silicon Valley entrepreneur now, there should be a global, agile masterplan. This plan is based on the digital maturity of all individual countries. Countries constantly need to ask themselves: ‘How does my individual maturity relate to the overall long term masterplan? What does this mean for data regulation? Where should we be a bit more protectionist? Where should we be more flexible to give society a chance to grow?’ It’s a complex balancing act, but in the end, the masterplan could benefit us all.”

“Ideally, there’s a global, agile masterplan, which takes into account the level of digital maturity of all countries. In this way, we can streamline regulation and set clear goals for digital growth for all.”

What’s your take on the future of the open web?

“I’m most concerned about the explosion of fake news. I recently read a novel about the power of social media algorithms. If it means they have to show you fake news to keep you on their platforms, they’ll bombard you with it and then you’ll be stuck on your own island of belief. That said, it’s also a great opportunity for future entrepreneurs to solve these kinds of problems. Nowadays, chatbots are being developed to distinguish facts from fake news. These challenges keep me excited.”

What does the future hold for Zeotap?

“We’re currently in the best position ever, but trust me: we’ve come a long way. Entrepreneurs will always tell you that it looks cool from the outside, but from the inside, it can be a marathon. Today, the CDP market in Europe is exploding. Almost all brands are interested, and many of them need to be educated. CDP is a real hype, which companies like us benefit from. Together with our team, I want to achieve great things and harvest as much experience as we can in the next few years.”