Amobee, a mobile advertising company that was acquired by Singapore-based telecom SingTel last year, has bought Gradient X, a Los Angeles-based startup that offers a real-time bidding platform for mobile ads.
Gradient X will provide Amobee with a real-time bidding functionality for various ad channels and formats, such as video and HTML5, as well as contextual targeting capabilities. “We’ll be using Gradient X for the ingestion of real-time data to make sure that when we’re spending dollars on behalf of advertisers, we’re spending it at the right time and place and getting the best price for the advertiser at that point in time,” said Amobee CEO Trevor Healy.
In terms of the acquisition price, Healy declined to give an exact figure, but noted that the price was in the “double digit millions.”
Gradient X was founded in January last year with approximately $3.8 million in funding. It exited beta this summer and has about 20 employees, including CEO Brian Baumgart who was the former chief strategy officer at Adconion Direct and CIO Julie Mattern, co-founder and a former chief technologist at the Rubicon Project.
And even though Amobee performs services that are similar to a mobile ad network, Healy insists that is not the right label. The Redwood City, Calif. company sees itself as “more like a digital marketing company like Adobe than AdMob or Millennial Media,” according to Healy. “We work with a lot of those guys in placing orders on their network to get inventory, but we’re not a digital ad network or a mobile ad network,” he said.
Finding an effective way to leverage mobile advertising is still a challenge for many companies. Mobile ad networks like Augme, Velti and Millennial Media have struggled to turn a profit while mobile publishers like Facebook and Twitter, which can sell inventory directly to advertisers, are taking a bigger slice of ad revenue.
IDC analyst Karsten Weide noted in an April report that, “mobile ad networks are losing market share to publishers and we expect them to lose even more going forward.”
Even as it distances itself from mobile ad networks, Amobee faces stiff competition from ad tech firms like mobile DSPs that are carving out their own space, as well as companies that control huge swaths of inventory like Amazon, Facebook and Google.
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