Industry insiders were largely puzzled when LinkedIn said it would buy cross-device linkage company Drawbridge in May.
LinkedIn buried the announcement in a blog post, and the LinkedIn-Drawbridge synergies weren’t obvious, so it made sense to assume the purchase was either an acqui-hire or a fire sale.
But, according to two AdExchanger sources, LinkedIn paid just under $300 million for Drawbridge.
While much of the advertising industry didn’t see the value of Drawbridge, LinkedIn did.
LinkedIn is getting rid of Drawbridge’s business, but it values the company based on how it can help LinkedIn with relevance and targeting both on platform and off network, said Penry Price, LinkedIn’s VP of marketing solutions.
“Over a period of some years, it will pay for itself,” he said. He anticipates Drawbridge will fill in some of the blind spots LinkedIn has on its users.
“We know the math on every percentage of matching and ID,” Price said. “Each percentage we can increase, we know exactly what that means for monetization and engagement. So, it’s really just a math equation with regard to how much it’s worth to us over time.”
It’s hard for outsiders to appreciate that sort of math if they only evaluate Drawbridge's business.
But LinkedIn can see the potential for “how much better we can be in terms of performance, when it comes to matching IDs and creating better identity graphs,” Price said. “We’re excited. It’ll give us a deeper understanding about off network as well as get us smarter about retargeting on network.”