Collective Sells UK Ad Network To Time Inc.

Collective-Time-IncIn spite of the upheaval from Brexit, Time Inc. acquired Collective’s UK ad network business for an undisclosed sum on Tuesday.

Unlike Collective’s US ad network business, the UK business’ bottom and top lines are growing, said CEO Joe Apprendi. Focused on brand advertisers, the UK business provides creative services and ad formats that differentiated it in the market.

“Ensuring that that creative experience was consistent, repeatable and reliable [for each] IO and for exchange-based trading requires strong expertise and a services model,” Apprendi said. “They provided that turnkey in ways you would love to be completely automated, but aren’t in reality.”

The wheels for a sale have been turning for some time. In March 2015, Collective created a self-service platform, Visto, to help agencies and publishers manage reporting across different partners, similar to Collective’s now-defunct managed service. In December, it split into two independent operating units, one for Visto and one for its ad network. It also tightened its belt, laying off 20% of its staff.

Then in January, Collective hired a banker to shop its UK business. Time Inc. made sense.

“Collective’s offering can become further strengthened with assets that Time Inc. had – its unique data, content and supply – to make that ad network offering defensible long-term,” Apprendi said.

Post-acquisition, Collective will continue to operate as a separate business. Its US business, undergoing decline as American clients move to self-service, isn’t for sale. “Not at this moment,” Apprendi said.

But Collective’s 11-year-old ad network business is being replaced by a tech play, a path chosen by other ad networks. “We watched and learned longer at Collective,” Apprendi said.

As programmatic buying and agency trading desks replaced ad networks, Collective’s peers have either evolved their business models, been acquired or are struggling. Undertone, which, like Collective UK, specialized in creative services, sold to Perion last December, for example. Time Inc. picked up Viant in February. Other ad networks became demand-side platforms or supply-side platforms.

Collective has gone both the tech route and, with the sale of its UK business, the acquisition route.

“We want to be tech-first globally vs. having a managed services business in every market, which is what we did in the US and UK,” Apprendi said.

Besides selling the UK business, Collective raised $34 million in growth funding in June, bringing its total funding to more than $100 million. Although its investors were aware of the impending Time Inc. sale, he said, the investment was not contingent on its close.

The funds will add to the $20 million in research and development that Collective has already invested in its Visto platform. Apprendi envisions an “enterprise advertising hub,” with Visto expanding from a self-service reporting tool to a platform that unifies data, workflow and execution.

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