Dive Brief:
- Yum Brands acquired the artificial intelligence (AI) business of performance marketing firm Kvantum, according to an announcement. Financial terms of the deal, which is expected to close by the end of the first quarter, were not disclosed.
- The owner of KFC, Taco Bell, Pizza Hut and The Habit Burger Grill will tap into Kvantum's machine learning-powered technology to make more informed media-planning and calendar decisions and accelerate its overall data-driven marketing strategy.
- Yum will also leverage Kvantum's business in tandem with Collider Lab, a consumer insights and marketing strategy consultancy it purchased in 2015.
Dive Insight:
Yum is making a significant bet to shore up its internal technology capabilities with the acquisition of Kvantum's AI division. Yum will use Kvantum's proprietary machine learning and econometric modeling expertise to measure the effectiveness of campaigns across owned, paid and earned media channels in specific geographies. The deal offers the latest sign that blue-chip marketers are moving quickly to build out their data-driven strategies, with a premium placed on solutions that can improve media efficiency and marketing measurement.
"Kvantum's technology and the U.S. based leadership capability it brings will be a fantastic addition to the Yum! family, allowing us to apply a disciplined marketing sciences program at scale and fast-track our data and analytics strategy," Clay Johnson, chief digital and technology officer at Yum, said in a press statement.
For Yum, reaching those benchmarks could be a pressing matter as more of its business gravitates toward digital and mobile, two sales channels that have seen explosive growth amid the coronavirus pandemic. Several Yum chains, including Taco Bell, are now experimenting with store concepts that better accommodate areas like mobile ordering.
At the same time, Yum is attempting to balance Kvantum's focus on data and analytics with the human elements of marketing. The restaurant owner is pairing the new AI business with Collider Lab, a consulting firm staffed with anthropologists and sociologists who attempt to extract "culture-based" consumer insights.
Both Kvantum and Collider Lab reinforce Yum's broader mission to keep its brands relevant, easy to access and distinctive, or R.E.D., as the company bills it. Collider Lab has helped Yum ensure that it's "pivoting our brands in the ways that make sense for the consumer," an important consideration given the company's global scale, chief executive David Gibbs told QSR Magazine last year.
More consumer brands have made splashy digital marketing acquisitions in recent years as they look to lessen their reliance on third parties like agencies while quickly scaling solutions that can be pricey and time-intensive to develop in-house. But the approach doesn't always pay out.
McDonald's is considering a partial sale of Dynamic Yield, the AI company it acquired for more than $300 million just two years ago, The Wall Street Journal reported earlier this week. Some franchisees have complained that Dynamic Yield has not delivered on the expected sales boost while finding its technology lacking, the Journal found. Dynamic Yield executives claim that a partial sale has always been in the cards and that "now feels like the right time to explore that possibility."
