The best part of raising money? Spending it.
On Tuesday, six months after it announced a $15 million Series A round, ad ops startup Aditude announced its acquisition of CPMStar, an SSP focused on helping web-based game developers and gaming-oriented publishers monetize.
As part of the deal, Aditude will get CPMStar’s owned-and-operated sites and take over its existing monetization partnerships with desktop game portals, including Armor Games, Nexon and MMOBomb. With the addition of CPMStar’s eight employees, Aditude’s headcount is now roughly 30 people.
Aditude declined to reveal the deal price.
The acquisition should help Aditude expand its footprint in the gaming vertical and boost the appeal of its publisher network among gaming and technology advertisers, said Founder and CEO Jared Siegal.
But the main rationale, from Aditude’s perspective, was CPMStar’s already-established direct sales business, which complements Aditude’s programmatic expertise, Siegal added.
Direct sales and audience scale
Aditude started out providing publisher products geared toward programmatic monetization, such as its proprietary header-bidding wrapper.
Despite its initial focus on programmatic, however, building a direct sales business has long been a goal. The easiest way to do that, according to Siegal, was to acquire a company that already had an established pipeline of direct relationships.
Aditude explored acquiring CPMStar before it announced its Series A in August. In fact, when Aditude brought on Volition Capital as its sole Series A investor, the process involved preparing a list of possible acquisition targets. CPMStar was at the top of that list, Siegal said.
CPMStar works with many well-known studios, including Wizards of the Coast, publisher of Magic: The Gathering. That’s the kind of baked-in connection to an established gaming brand that would have taken Aditude years to build on its own.
On top of bringing a ready-made direct business to the table, CPMStar will also help Aditude strike deals with desktop gaming publishers at a time when audience and advertiser interest in browser-based gaming is surging, Siegal said. Altogether, CPMStar’s publisher network reaches 800 million monthly active users, according to Aditude.
Because gamers are all about authenticity, Siegel said, “it makes sense for us to acquire a company that already has inroads with gaming publishers, and that is basically a gaming publisher itself.”
Plus, Aditude is now better positioned to pitch its own programmatic products to CPMStar’s existing publisher clients, he said. And Aditude can also bring the demand it gets from its other SSP partners to the publishers that monetize through CPMStar.
But CPMStar will continue to operate its SSP as a standalone business, which means no publisher will be required to use Aditude’s ad ops products in order to keep using CPMStar’s SSP.
Lastly, CPMStar, which already has sales people based in Europe, should also help Aditude expand beyond its focus on North America. Europe tends to be more direct-sales-oriented than the US ad market, Siegal said, and “it’s important to have employees that know the agencies and brands in Europe.”
Future plans
Going forward, Siegal sees an opportunity to expand beyond CPMStar’s strong presence in browser-based gaming to make inroads into mobile app monetization.
Aditude is also interested in using its new direct sales team to increase outreach to sports brands and publishers, considering the young male audience overlap between gaming and sports.
Plus, with the addition of CPMStar’s publisher relationships, Aditude has effectively doubled the audience size of its existing network to about 1.6 million monthly active users, Siegal said.
This increased audience reach will help Aditude create scalable private marketplaces (PMPs) for advertisers looking to reach more niche gaming audiences. For example, a bigger publisher footprint means more scale for gaming PMPs aimed at specific geos or PMPs oriented specifically toward women gamers, Siegal said.
And PMPs, which tend to be sold directly, will also benefit from CPMStar’s direct sales expertise, Siegal added.
Although the CPMStar acquisition is Aditude’s first, it won’t be its last. The startup isn’t done shopping, Siegal said, and is in active talks with a few other acquisition targets.
Looks like more evidence that ad tech’s M&A dry spell might be over.
