Dynamic Yield

Before generative AI: data-driven personalization

Liad Agmon and Omri Mendellevich founded Dynamic Yield in 2011, years before the term "generative AI" came into common use. The kind of AI the company worked on was different: not creating new content, but machine learning that analyzes users' behavior patterns and decides, at any given moment, which version of a page, recommendation or offer will raise the chance that this specific user takes a desired action. This approach, known as a "decision engine", was common in digital marketing even before the era of large models, and it shows that the use of AI in business did not start with ChatGPT.

A menu that changes with the weather

The most visible use for consumers was in McDonald's digital drive-thru menus. According to McDonald's official announcement from March 2019, the company planned to use Dynamic Yield's technology to show different menu items depending on the time of day, the weather, how busy the restaurant is, and which items are selling well at that moment. In the same announcement the chain planned to extend the technology to its self-order kiosks and its global mobile app, and according to Mastercard's 2022 announcement it did use it in drive-thrus and ordering kiosks in several markets. A customer arriving on a cold morning might see an offer for a hot drink; a customer arriving at a busy time might see items that are faster to prepare. This was one of the first uses, on a huge global scale, of a "decision algorithm" that most consumers did not even know was working on them.

$300 million that was never officially announced

McDonald's official announcement from March 2019 did not include the deal amount. A source close to the deal told Calcalist that the amount was more than $300 million, a figure repeated in many other reports in the international media. But to be precise: this is an amount leaked by an anonymous source, not a figure published by the parties themselves. The same pattern repeated in the sale to Mastercard in 2022: both sides declined to publish the deal amount, but in the second quarter of 2022 McDonald's reported an accounting gain of $271 million related to the sale. This is an official figure that appears in its financial statements, even if it is not the same as the exact sale price.

From a marketing decision to part of a payments infrastructure

The move from McDonald's ownership to Mastercard's, between December 2021 (when the agreement was announced) and 4 April 2022 (when the deal actually closed), changed the business meaning of the technology. At McDonald's it served mainly as an internal marketing tool for one restaurant chain. At Mastercard it joined the Data & Services division, alongside the loyalty platform SessionM, and is meant to serve a wide range of client brands in retail, finance, travel and food: a shift from an internal product to a component in a broader services infrastructure that Mastercard offers its customers. According to Mastercard's announcement when the deal closed, Dynamic Yield was then helping more than 400 brands deliver personalized experiences.

A founder who had already done it twice before

Liad Agmon came to Dynamic Yield with a track record as a serial entrepreneur. He founded the information security company Onigma, which was acquired by the security giant McAfee in 2006, and then the social search engine Delver, which was acquired by Sears Holdings in 2009. Dynamic Yield, acquired first by McDonald's and then by Mastercard, was in effect his third exit from a company he founded. A track record like this, of an entrepreneur who had already sold two previous companies, helps explain why both a global restaurant chain and a payments giant chose to invest in his technology, even before AI was at the center of public attention the way it is today.