In the latest chapter to a rather convoluted M&A tale, AppNexus will snap up ad tech firm Real Media Latin America (RMLA) from Peter Gervai, the Brazilian entrepreneur who paid $1 some 13 years ago to take it off 24/7 Real Media’s hands.
The companies didn’t disclose the deal price or Sao Paulo-based RMLA’s revenues, but its headcount and customer roster suggest the company is a formidable player. RMLA employs 40 people to service the ad-serving contracts of some very big digital media sellers in Brazil, Mexico and Argentina. Those customers include Globo, Estadão, Walmart, MercadoLibre, El Universal Mexico and about 45 others.
The programmatic ad market in Latin America measured $5.3 billion in 2014, according to eMarketer, which forecasts that investment will grow to $8.3 billion by 2017. AppNexus says more than 80% of the region’s spend is concentrated in Brazil, Argentina and Mexico, where RMLA operates.
RMLA was at one time the Latin American arm of 24/7 Real Media, which sold it to Gervai in 2002 in exchange for a perpetual licensing-based revenue stream, in the very dregs of the dot-com bust. In the wake of that desperation move, agency conglomerate WPP Group bought 24/7 Real Media (in 2007), later renamed it Real Media and finally sold its key tech product – Open Adstream – to AppNexus in 2014 in a deal that valued the ad server at about $155 million.
As if that weren’t enough, AppNexus also hired former 24/7 Real Media CEO Jonathan Hsu as its COO/CFO in 2014. And so, many early members of the 24/7 Real Media band, as it were, have now gotten back together under AppNexus’ roof.
According to Hsu, bringing RMLA in-house will help AppNexus upsell existing Open Adstream customers on its other products, including its yield-management and forecasting tools.
“When a publisher like a Mercado Libre is installing its third-party ad server, they’ll want to also assess and figure out how to bring in other components of the stack such as a DMP or a standalone yield-management solution,” Hsu said. “In some cases they will help a Mercado Libre curate and integrate those offerings.”
Hsu added that a series of global sporting events, including last year’s World Cup and next year’s 2016 Olympic Games in Rio, have been catalyzing events for Brazil’s media.
And then there’s the talent consideration.
“Having this install base of 40 very knowledgeable and experienced individuals who in many ways invented Internet advertising and ad tech in Latin America is very powerful,” he said.
