5 stories about mergers and acquisitions of technological advertising startups

The market of online advertising is perceived by many IT specialists as not interesting enough: creating systems for displaying banners and advertisements does not seem attractive to them. Some investors also do not see the point in investing in such startups.

However, this industry is quite advanced in terms of technology, and companies operating in this market are creating truly innovative solutions that attract such giants as Google, Twitter and Yahoo. Today we will talk about some purchase stories, mergers and acquisitions, advertising startups.
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Google and Admeld

The Google ad exchange, called Double Click Ad Exchange, was once a separate SSP provider that provided a platform for optimizing ad placements called Admeld. This system is able to identify advertising inventory that sells less well and replace it with more efficient tools in real time, which allows increasing the ROI of advertising campaigns. Such functionality has attracted such famous publishers (advertising platforms) as Discovery, FOX News, Huffington Post, IAC, Thomson Reuters and WWE.

The deal amounted to $ 400 million. After the introduction of support for RTB technology, the effectiveness of the Google advertising network has increased significantly - sales of advertising inventory increased from 8% in 2010 to 68% in 2011.

Rubicon Acquisitions

In its history, the leading player in the online advertising market, Rubicon Project, actively resorted to buying technologies and entire startups - it was this tactic that enabled the company to achieve significant success.

After its founding in 2009 and attracting the first investment of $ 33 million, Rubicon, which specialized in A / B testing of advertising networks and banner formats, was acquired by the startup OthersOnline - it developed the technology for compiling network user profiles (the amount was not named). Clients of this project were publishers. The purchase was made in order to get the opportunity to combine information from different data providers and create the most complete audience representation that would be of interest to advertisers.

Rubicon’s acquisitions did not end there - in 2010, the Site Scout information security project was purchased . Startup technologies were used to implement a solution that allows publishers to avoid placing malvertising on their resources.

Then, the company also absorbed the popular Fox Audience Network advertising network, which has unique display advertising technologies, and in 2012, to enter the mobile market, a deal was made to acquire the Mobsmith advertising startup.



As a result of the acquisition of technology companies and the integration of their developments into their own systems, Rubicon has become one of the leaders in the online advertising market (according to Forrester).

The deal between Acxiom and LiveRamp

The famous global corporation engaged in the collection and analysis of data for the implementation of more precisely targeted advertising campaigns of corporate clients, in May 2014 for $ 310 million acquired a startup LiveRamp, developing technology to load customer data into applications for digital marketing.

Acxiom and LiveRamp together have connections with 7,000 global customers and technology partners. As a result of the takeover, the combined company will be able to cover high-precision advertisements up to 99% of the US adult population through various channels and on various devices. During the year from the date of the transaction, Acxiom and LiveRamp expect to achieve the same performance outside the United States - in Europe and the Asia-Pacific region.

Twitter and Mopub purchase

In September 2013, microblogging service Twitter bought a startup in the field of mobile advertising MoPub. The purpose of the transaction was to expand the capabilities of the microblogging surfing advertising platform and create an automated system for buying advertising on it using RTB technology. The deal was one of the largest in the history of Twitter - according to the publication of The Financial Times, its amount could be from $ 300 to $ 400 million.



The management of the social network did not stop at this purchase. In early July 2014, it announced the acquisition of TapCommerce, a company specializing in mobile advertising. This service allows real-time re-attract customers who have downloaded any application to your phone. On the platform of TapCommerce works, for example, the mobile version of eBay. The amount of the transaction was not disclosed, but according to Re / code, it was $ 100 million.

Amobee Double Deal

In June 2014, Amobee, a mobile advertising company and previously purchased for $ 321 million by Singapore mobile operator SingTel, announced a double takeover. Adconion technology projects (transaction amount $ 235 million) and Kontera ($ 150 million) became part of the company (and, accordingly, SingTel).

Adconion after several changes in business strategy, focused on working in the niche of advertising in online video (this area is quite promising, Facebook recently bought a live advertising startup LiveRail for $ 400-500 million), the number of customers using its platform exceeds 2000. Kontera startup has been developing mobile advertising and analytics technologies.



As representatives of Amobee said, the takeover of these two projects was due to the growing competition in the advertising market, which forces players to consolidate their assets in order to be able to provide a wider range of services to their clients.

In 2013, Amobee also bought a startup Gradient X, which developed a platform for mobile RTB advertising.

findings

The experience of foreign companies indicates that the online advertising market, during several stages of its development, has come to the need to improve the efficiency of the systems. Often this goal is achieved through the implementation of services using real-time auction (RTB) technology, which allows advertisers to use one system to buy advertising at various sites, and publishers to sell existing virtual “advertising space” with the greatest efficiency.

At the same time, the needs of modern advertisers are quite wide, so advertising companies are thinking not only about improving the performance of placements, but also about providing related services - automatic reputation control (Brand Safety), counteraction against malicious advertising (adware), etc. Often it is not possible to implement these projects on our own, therefore companies are willing to pay big money for the purchase of services with similar technologies. It is (and the amounts that Western giants pay for the companies they need) that the niche of advertising startups is very promising.

Posts and related links:

• History of the RTB market: stages of development and the emergence of major players
• Brave new world: mobile operators, as the largest providers of advertising data
• Promotional Wars: Search Engines vs. Internet Providers
• A / B testing of ad networks (Advertone service)