Cadent, an advanced TV advertising company, announced its intentions on Monday to drop $324 million to acquire the performance marketing company AdTheorent.
AdTheorent brings performance marketing chops and new agency clients to the table, which should support Cadent’s plan to reposition itself as an omnichannel marketing company – not just a TV advertising specialist – CEO Nick Troiano told AdExchanger.
Cadent took the first step toward becoming cross-platform nearly a year ago, with its acquisition of EMX’s supply-side platform as its first foray into digital display inventory. And when the private equity firm Novacap bought Cadent last August, the writing on the wall foretold more acquisitions.
“What we’re focused on is tapping into digital demand,” Troiano said. And increasing digital demand requires a performance marketing approach that encompasses online video and display in addition to streaming and addressable TV.
For that strategy to work, he added, it must begin with audience-based targeting.
All about performance
AdTheorent’s tech stack includes an audience graph that helps brands find and target customers based on online patterns without revealing their identity (aka cookieless).
Cadent plans to integrate this data set into its ad-buying platform, which includes its own audience graph, Troiano said. Combined, the two identity sets will have higher match rates with advertisers, which should result in better campaign performance.
But the concept of performance means something different in TV land than the digital world of search and social. Consumers might buy a product they see advertised on Amazon or Instagram almost instantly, whereas purchases attributable to TV ads typically don’t happen right away, nor do they happen via direct clicks (not yet, at least).
In Cadent’s case, “performance” refers to producing value for the advertiser, including cost efficiencies that come from buying a more efficient media mix for a target audience. That definition means performance isn’t restricted to metrics like cost-per-acquisition or cost-per-click, Troiano said. For some brands, “performance” could mean an increase in brand awareness at a cost that more than justifies the investment.
Either way, Cadent hopes an outcomes-based targeting approach that works across channels will woo more digital-first advertisers that may be considering TV.
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Speaking of which, attracting a wider client base is also on Cadent’s agenda.
Cadent and AdTheorent have many overlapping clients – they both work with most of the major holdcos, Troiano said – but AdTheorent has a larger footprint among smaller independent agencies.
Independent agencies, many of which serve local and regional advertisers, make up roughly 60% of AdTheorent’s client base. For Cadent, indie agencies are 30% of clientele, Troiano said.
Cadent has fewer small advertiser accounts because its business for years was linear and addressable TV – a category of larger, national brands.
“But regional advertisers don’t discriminate between connected TV and digital,” Troiano said. They just want to reach audiences in a particular location, at a certain rate, and for a certain metric.
By improving targeting options and cost efficiencies for its non-TV supply, Cadent hopes to attract more local advertisers in addition to the ones it acquires with AdTheorent.
For Cadent, Troiano said the next step will be to integrate the two tech stacks and onboard AdTheorent’s 300-or-so employees, which should begin over the summer once the deal closes. Moelis & Company LLC is acting as Cadent’s lead financial advisor on the transaction.
