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Rocket Fuel reportedly sold customer data to competition

Tim Maytom

Now-defunct marketing platform Rocket Fuel regularly mixed client data, often selling segments containing unique data on to competitors or powering its AI-driven algorithm with data pooled from multiple sources, according to AdExchanger.

Citing multiple sources with direct knowledge of the firm's practices, AdExchanger has reported that the company regularly pooled remarketing data belonging to clients and sold it on without permission. The firm's algorithm benefitted from this commingled data, producing more effective results, and clients were largely unaware that such practices were being undertaken.

"Rocket Fuel's mantra was 'Performance drives everything'," said one former executive at the company. "Drive performance however you can and it doesn't matter how you get there or whether you help agencies or clients understand it."

The firm, which no longer operates, and sold off the majority of its technology to Sizmek, benefitted from a so-called 'black box' approach, where clients were not given details on how its technology operated, but were simply presented with results. At its heights, Rocket Fuel delivered excellent results and ROI, but as transparency became increasingly important to brands, agencies and publishers, it fell from favour.

"Rocket Fuel was not wrong ti invest in the application of AI to advertising," said Joanna O'Connell, vice president and principal analyst at Forrester. "But they were wrong to assume that people would be okay with hearing, 'Just trust us - just trust the machines.'"

AdExchanger's story exploring Rocket Fuel's rise and fall paints the picture of a firm wrapped up in its own success, and unwilling to adapt to a changing market. Despite a high-profile IPO in 2013, the firm lagged behind on mobile, stuck by its black box approach to ad tech, and demanded extremely high margins. In 2014, Rocket Fuel acquired data management and demand-side platform [x+1], and as the two companies attempted to merge their technology, Rocket Fuel's shady practices became apparent.

"The data Rocket Fuel was using...policy-wise, that was data we wouldn't use," said one former [x+1] employee on the analytics side, speaking to AdExchanger. "This sort of thing, using data in indirect ways, does happen at other places, even today, but with more transparency to clients. Rocket Fuel didn't want to go that extra mile of being upfront."

Reaction to the revelations about Rocket Fuel's practices have been understandably passionate, with many marketers taking to social media to voice their concerns. Ari Paparo, CEO of Beeswax.com, called the news "the worst case scenario for marketers" while Matt Collins, senior vice president at Simulmedia, said the firm "illustrated the problems that have come to plague ad tech through its adolescence: lack of transparency, bad data policies, & hubris".

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