Facebook and Google are no longer the ad tech acquirers they once were, and yet, the M&A landscape of 2017 is littered with their fingerprints.
Media companies swallowed one other to add scale and massive amounts of content to stave off the duopoly’s dominance. Just look at Meredith-Time, AT&T-Time Warner and Disney-Fox. AT&T’s bid for Time Warner is also a data play: The telco hired GroupM’s North American CEO, Brian Lesser, to build out its ad stack, and AT&T CEO Randall Stephenson has acknowledged how data increases the value of ad inventory.
Disney’s purchase of key Fox assets also reflected a need to control the distribution pipes. By increasing its Hulu stake to 60%, Disney will control a video portal competitive with Amazon, Netflix, Facebook and YouTube.
Even smaller acquisitions seemed influenced by Google and Facebook. The Trade Desk bought Adbrain for its device graph. That data set, Trade Desk CEO Jeff Green told AdExchanger, is “something agencies increasingly want and expect from their non-walled-garden ad platforms.”
The ad tech industry also saw what Luma Partners CEO and founder Terence Kawaja called the Great Ad Tech Cleanup, wherein he predicted no public ad tech company will have an I/O model by Q1 2018.
Indeed, many companies that began as ad networks were snapped up. Sizmek acquired Rocket Fuel, Genesis Media merged with Altitude Digital, RhythmOne bought Yume and Tremor divested itself of its demand-side business.
2017 was also a year when companies cut their losses – Rubicon Project sold its Chango business and Ghostery sold its ad tracker to Cliqz – and became more strategic when they did acquire.
With its purchase of nToggle, for example, Rubicon attempted to regain some of the traction it lost with the advent of header bidding. Snap, with a developing programmatic marketplace, added Metamarkets and Placed.
OpenX bought two tool companies to strengthen its existing platform. Oracle acquired Moat to enhance its Data Cloud. And Nielsen’s purchase of Visual IQ gave it much-needed strength in digital attribution. No longer were vendors making big bets to get into a new, improbable line of business.
The following is a non-exhaustive list of some of the notable M&A activity of 2017.
Rubicon Project sells Chango business and some employees to IgnitionOne. Over the past two years, Rubicon has focused on mending its business and jettisoning parts that weren’t working, including Chango, which Rubicon acquired two years prior. Rubicon began referring Chango clients to IgnitionOne, for a fee.
Time Inc. buys Adelphic to be its foundation for a people-based DSP. The pub had made several ad tech investments in recent years, including Viant in 2016. Publicly, the acquisitions seemed successful – but with Meredith Corp.’s November agreement to buy Time, its future is unclear.
Shanghai PE firm Innotech buys Ad-Juster. Chinese consortiums paying astronomical prices for American ad tech firms factored into 2016. Such was not the case in 2017. Still, data aggregator and discrepancy management firm Ad-Juster managed to get a rumored eight-figure price.
Cannes Lions owner Ascential plc buys MediaLink for up to $207 million. The final price will hinge on MediaLink’s performance through 2019. MediaLink has been a major presence at the Cannes Lions. While the two are separate entities, MediaLink should be able to leverage Ascential’s connections and enhance its business of putting power players together.
Ghostery sells ad tracker to Cliqz and focuses on compliance. Ghostery had seemed like a business with a split personality.
On one hand, its browser plug-in showed consumers ad trackers on individual pages, but it also had a suite of enterprise technologies. In the end, German browser Cliqz acquired the ad tracker business and Ghostery name in an all-cash deal. And the compliance-focused B2B suite became its own entity with its original name, Evidon.
Singtel buys Turn for $310 million. Another independent DSP finds a home, leaving MediaMath, DataXu and Adform as the remaining scaled independents. And shocker, shocker: Turn’s acquirer was a telco – an industry that’s increasingly investing in ad tech.
Singtel is no exception: It bought Amobee, Adconion and Kontera between 2012 and 2014. Amobee CEO Kim Perrell got to fold Turn into her division, while Turn CEO Bruce Falck headed to Twitter to whip the little blue bird’s revenue-driving products into shape.
Altice buys Teads for $307 million in cash. Another telco buys another ad tech company. This time, it’s Netherlands-based Altice buying outstream video ad tech company Teads. As with Verizon and Oath, Altice will leverage its first-party subscriber data to boost Teads’ advertising business.
Digilant buys Anagram. With programmatic expertise increasingly in demand, one wonders if Digilant’s acqui-hire of Adam Cahill’s consultancy is a prelude of more things to come. Cahill comes from Carat and Hill Holliday, so he knows programmatic in spades and his role will be to boost Digilant’s programmatic ad services capabilities.
Spotify buys MightyTV. Despite Spotify’s video ad capabilities, this acquisition isn’t the most intuitive. MightyTV consolidates shows available across subscription platforms like Netflix and Hulu, letting its users swipe to find the shows they want to watch. But Spotify sees value in MightyTV’s recommendation capabilities: Knowing what users want to consume is a major step toward showing better ads.
This purchase was a big-time buy because it brought Oracle Data Cloud into the analytics space, making it a sudden competitor to Nielsen and comScore. In addition to tying media spend to in-store purchases – a capability Oracle gained when it bought Datalogix – it can now show whether an online impression actually fired.
With Moat off the table, Integral Ad Science and DoubleVerify were the remaining independent ad verification vendors. At least, until August …
French media conglomerate Vivendi buys the Bolloré Group’s 60% stake in Havas, valued at 2.36 billion euros. Vivendi acquired its 60% Havas stake in June and, by October, bought almost all remaining shares for a 94.75% stake. The acquisition isn’t a surprise: Bolloré Group Chairman and CEO Vincent Bolloré talked about merging Havas and Vivendi for some time, and his son, Yannick, is, of course, Havas CEO.
GroupM merges MEC and Maxus. To streamline, GroupM consolidated two agencies with overlapping capabilities: MEC and Maxus. The combined entity is now called Wavemaker, led by former MEC CEO Tim Castree.
This reorg mirrors other holding companies. In 2016, Publicis Groupe transformed its media business by breaking Starcom MediaVest Group and ZenithOptimedia into four global agencies. For many advertisers, there’s little differentiation between media agencies, which is why consolidation can make sense.
Snap buys Placed. We’ve seen Google, Twitter and Facebook get acquisitive, but this year, it’s Snap’s turn as it bolsters its ad products to ensure a steady revenue stream. Snapchat gets improved attribution, as Placed has insight into mobile device activity beyond Snapchat users. Snap’s recent shopping spree also included Flite in December 2016 and Metamarkets in November.
Access Intelligence acquires AdExchanger. Terms were not disclosed.
Rubicon buys nToggle. Rubicon may have missed the early stages of header bidding, it’s making up for lost time by buying nToggle. NToggle streamlines bid requests, an important capability because header bidding inundates DSPs with impressions and managing that uptick is expensive. NToggle’s tech helps buying platforms manage that influx, letting them bid more confidently and win more auctions.
Sizmek buys Rocket Fuel for $145 million. First Turn, then Rocket Fuel. Once valued at $1 billion, the $145 million price is a letdown for those who fueled up during the company’s early days. Rocket Fuel CEO Randy Wootton had earmarked 2018 as the return to profitability but, he told AdExchanger, the board opted for a sale instead. Sizmek inherits Rocket Fuel’s AI technology and media execution abilities.
Zeta Global buys Boomtrain. Speaking of AI acquisitions, cloud-based CRM platform Zeta Global bought Boomtrain for its machine learning tech. Nearly all the marketing technology providers – Adobe, Salesforce, IBM and Oracle – have some sort of machine learning or AI engine to power their apps. In 2017, machine learning became mar tech table stakes.
Outbrain buys native DSP Zemanta. The goal here is to help marketers scale their native ad buys. And publishers will be able to see more unique demand. The acquisition is part of Outbrain’s bet that native will be bigger than display advertising in a few years.
Discovery Communications buys Scripps for $14.6 billion in stock and cash. After going against Viacom, Discovery came out the winner in the bid to purchase Scripps Network Interactive, which owns Food Network and Travel Channel, among other properties.
Scripps’ content gives Discovery more negotiating power with cable providers. Scripps also gains Discovery’s international distribution. Other M&A activity – like AT&T’s bid for Time Warner and Disney’s intent to acquire 21st Century Fox’s assets – underscores the importance of owning content.
Tremor sells DSP biz to Taptica for $50 million. Tremor used to service both the demand and the supply sides. But in selling its DSP business to Taptica, it brought its focus back to the sell side.
The new-look sell-side-only Tremor also rebranded to Telaria and, as of September, began trading on the New York Stock Exchange. The split gives Telaria a much more streamlined vision without having to serve two masters.
Genesis Media merges with Altitude Digital. Following Rocket Fuel and Tremor, Altitude Digital’s merger with Genesis marks further ad network consolidation. It’s also a scale play, as the two entities will pool their direct publisher relationships.
PE firm Providence Equity Partners buys DoubleVerify for around $200 million. Providence intends to acquire more ad tech pieces to add value to DoubleVerify. The hope, said CEO Wayne Gattinella, is to eventually measure the quality of human engagement – not just media placements.
Valassis buys MaxPoint for $95 million. The formerly public MaxPoint joined the PE parade when it sold to Valassis, which is owned by Harland Clarke Holdings. MaxPoint wasn’t in the best financial shape given its decision to go private, and Valassis hopes the acquisition will improve its ability to manage cross-channel media campaigns.
RTL Group takes full ownership of SpotX for $145 million. RTL Group already had a 65% stake in SpotX since 2014, but it snapped up the remaining shares. Since the initial acquisition, SpotX went from eight people to over 80 across Europe.
RhythmOne Buys Yume for $185 million in cash and stock. Yume had been hunting for strategic alternatives since November 2016 and finally netted an acquirer with RhythmOne, which used to be a video ad network. RhythmOne hopes to add more demand to its video marketplace by plugging in Yume’s DSP.
Thunder buys Adacus. While Thunder used to focus on creative distribution, its purchase of Adacus gives it analytics and measurement abilities, such as measuring the effect of different creative types.
SAP buys Gigya. Being able to manage identities is a big deal these days, especially given the need to compete with Google, Facebook and, increasingly, Amazon – all of which own direct consumer relationships. If SAP can successfully integrate Gigya, it will inherit the ability to manage logins across the web.
OpenX buys Mezzobit and PubNation. These acquisitions strengthen OpenX’s SSP offering. Mezzobit helps pubs monitor tags that impact page performance, and PubNation automates bad ad removal. Both tools add value to OpenX’s existing platform.
Nielsen buys Visual IQ. Nielsen’s panel-based measurement system may have legacy, but not all advertisers are satisfied with what it offers in a digital-driven world. Earlier this year, Nielsen stood by as Oracle snapped up Moat. Because Visual IQ provides digital attribution, it enhances Nielsen’s digital measurement capabilities. Perhaps this push will finally satisfy networks like NBC, which aren’t entirely convinced Nielsen’s Total Audience Measurement is complete.
AT&T agrees to acquire Time Warner for $85.4 billion. This massive deal is one for the ages, unless the US Justice Department has something to say about it.
The Justice Department filed an antitrust suit, which will go to trial March 19. But this prospective purchase isn’t just a tremendous content play. AT&T CEO Randall Stephenson knows the value of viewership data – and how it can juice the value of ad inventory.
AT&T hired GroupM CEO Brian Lesser in August to build out its ad platform. Stephenson noted at a Vanity Fair summit: "Using the viewership data from our customers ... we're able to monetize the ad inventory on DirectTV two to three times what you're seeing in most media companies."
The Trade Desk buys Adbrain. This first-ever acquisition gives The Trade Desk a cross-device identity graph. In so doing, The Trade Desk makes its DSP more attractive for agencies working with big marketers who buy inventory across a range of publishers and channels.
Snap buys Metamarkets for reportedly less than $100 million. Since 2016, Snapchat has committed to developing an auction-based buying process (at the expense of its CPMs). So it’s clear why Snap would value a company like Metamarkets, whose analytics gives its ad tech clients insight into their programmatic marketplaces.
Meredith buys Time Inc. for $1.85 billion. This acquisition creates a huge digital media business of 170 million monthly uniques in the US, and will also merge two very different ad sales strategies.
Video ad server Innovid buys Taykey. Innovid will retire the Taykey brand name and inherit machine learning technology that determines content context and enhances ad inventory value.
Nexstar Media Group buys mobile video platform LKQD for $90 million in cash. Nexstar, which has 171 US TV stations, has been vocal about the need for broadcast technologies to innovate. In buying LKQD, Nexstar inherits a data management platform, ad server, ad player and ad decisioning system.
Disney buys 21st Century Fox assets, including Hulu stake, for $52.4 billion. Yes, this purchase creates a tremendous media content empire. And yes, the X-Men and Fantastic Four can now join the Marvel Cinematic Universe. But this acquisition also gives Disney a majority stake in Hulu.
And it was no secret that Disney wanted to create its own content portal competitive with Netflix and Amazon. Now it controls the portal and has a variety of content to populate it. Will Disney also bring data to entice ad buyers? So far, no word on that.
Dentsu-Aegis buys B2B media agency DWA. B2B isn’t the sexiest type of advertising, but it’s certainly lucrative, and Dentsu has been on a tear. DWA is its latest B2B acquisition, following gyro and Band in 2014.
In DWA, Dentsu inherits an impressive client list, including Cisco, Logitech and TriNet. As B2B targeting becomes more refined – especially with the emergence of account-based marketing – expect more acquisitions in this space.