Home Mobile A Day After Vowing Ad Tech Investment, Yahoo Buys AdMovate

A Day After Vowing Ad Tech Investment, Yahoo Buys AdMovate

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Scott Burke, SVP, YahooFollowing Yahoo CEO Marissa Mayer’s vague comments during Tuesday’s Q2 earnings call promising to increase investments in the company’s ad-tech offerings, the portal has done something concrete by acquiring mobile-ad targeter and data-management software provider AdMovate.

Barely a year old and, up until now, operating in stealth mode, AdMovate describes its purpose as delivering “personalized, hyper-local targeted offers” on mobile devices. The four-person startup includes two former Turn engineers, who will initially work on Right Media, Yahoo’s ad exchange, said Scott Burke, SVP of display advertising and advertising technology.

In a blog post, Burke said AdMovate’s talent and technology will be added to the Sunnyvale, Calif.-based company’s existing — some might argue neglected — ad-tech platforms, which include the display-serving tool Apt, the data-management software of Genome and the ad exchange Right Media.

“AdMovate’s personalization technology accelerates our capabilities in mobile advertising, and we gain an exceptionally talented technical team,” Burke said in the post, adding in an interview that this deal wasn’t a mere acqui-hire.

Yahoo plans to quickly integrate AdMovate’s technology into its other display platforms and will be used to help create new ad formats and tools around mobile, Burke said. In the meantime, the AdMovate brand name will be retired.

Acknowledging that Yahoo still has a way to go in rebuilding its ad-tech services, Burke did say that the company hasn’t neglected that side of the business. That said, the attention has largely been on developing and refining the consumer-facing parts first, and then having the ad support follow.

“As Marissa has said since she became CEO, the focus has been on creating a better consumer experience around everything from weather to mail to [photo-sharing property] Flickr,” Burke said. “Now that we’ve gotten traction there, we can turn more attention to the display business.”

In particular, Burke said he has been focused on recruiting for the display services he oversees, noting that Yahoo has hired more than 150 engineers over the past year to work on the company’s ad platforms. The addition of AdMovate’s technology and small team will fit squarely with the buy-side tools Yahoo wants to restore.

“This acquisition does two things: AdMovate brings us unique mobile capabilities around the management data and what I would call mobile’s cookie-management problem,” Burke said. “The problem comes down to the limited effectiveness and use of cookies in mobile media. Plus, AdMovate’s technology could help Yahoo provide better answers around how to target consumers both geographically and behaviorally in ways that are accurate and privacy-friendly at the same time.”

While Burke wouldn’t say if there are similar deals in the works to boost Yahoo’s display business — “We’re always looking at possible acquisition targets across the board,” he said — he did say there will be more products being rolled out around programmatic, video and native advertising in the next few months.

As an indication of what kinds of things to expect from Yahoo, Burke highlighted the cost-per-click-based Stream Ads product for video that was released during Yahoo’s NewFront presentation this past spring as an example of what his team is working on.

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AdMovate is Yahoo’s 17th acquisition this year. Apart from the blogging network Tumblr, which cost Yahoo $1.1 billion, most of the other purchases have been relatively small and focused either on social media or mobile, or some combination of the two, such as the purchases of mobile gamers Loki Studios and Playerscale.

“The acquisition of AdMovate makes good on CEO Mayer’s promise to further invest in ad technology less than 24 hours after reiterating this priority on the quarterly earnings call.” said Dan Salmon, an analyst for BMO Capital Markets. “At the same time, the acquisition also helps support the company’s No. 1 priority of becoming a mobile-first company. And it also continues Yahoo’s focus on acqui-hiring smaller groups of engineers, rather than making large buys (Tumblr excepted), which tends to make integration and culture-fitting a smoother process.”

It’s not clear how much of a shot in the arm AdMovate will offer Yahoo’s existing display properties, but the effort has been enough to convince analysts Mayer is taking a specific step to address the competition seen as having eclipsed Yahoo’s pioneering ad-tech services.

“The AdMovate deal is part of Yahoo’s strategy of enhancing its ad-tech stack, particularly in mobile, where it’s playing catch-up to the likes of Google and Facebook,” said Youssef Squali, managing director at Cantor Fitzgerald.

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