Zeta Global, the marketing tech and data cloud, announced a strategic partnership with the location data company PlaceIQ on Thursday that will see Zeta take over PlaceIQ’s managed media business, including more than 20 employees.
Zeta has its roots in CRM, but has taken big strides into media buying this year, taking over Visto’s managed service business (formerly Collective) and then acquiring Sizmek (and former Rocket Fuel) DSP and DMP assets.
“Sizmek was our first big jump into having an activation platform,” said Zeta CEO David Steinberg. “And PlaceIQ is the next piece of that puzzle.”
The PlaceIQ unit will slot into Zeta’s burgeoning advertising division, which is led by former Sizmek Chief Growth Officer Mike Caprio.
The deal between Zeta and PlaceIQ is positioned as a strategic partnership, and not a partial acquisition. Terms of the deal were not disclosed, however.
As with its deal for Sizmek’s bankrupt assets, Zeta is seizing an opportunity to hoover up DSP market share on favorable terms. PlaceIQ isn’t going bankrupt, but it’s following other data companies like Tapad and Drawbridge that also retreated from media buying due to privacy risks and tech costs that didn’t outweigh the potential gains.
“We’ve always considered ourselves a location data specialist,” said PlaceIQ co-founder and CEO Duncan McCall. And now PlaceIQ’s pure-play data business has matured to the point that it can support itself without tacking on paid media.
“We were forced in a sense to be an ad business when we never thought of ourselves as an advertising company,” he said.
Aside from PlaceIQ’s ad-buying clients and employees, Zeta will also incorporate the location data set into its cloud data platform. Though that aspect of the deal is similar to other PlaceIQ partnerships with marketing clouds, consultancies or platforms like The Trade Desk that license its location data.
“We went out originally to get the data and we ended up seeing a tremendous amount of value in merging the advertising component of their business over to us,” Steinberg said.
Zeta is also a more suitable home for the ad tech business. Media buying is valuable and brings a lot of revenue, but comes with steep investments in talent and platform development. Zeta has raised $380 million total, and more than $300 million in the past four years, so it can support the ad tech business, Steinberg said.
Advertising was about half of PlaceIQ’s overall revenue, Steinberg said, but as the industry has seen with other pure-play independent DSPs, it is hard to be self-sustaining, profitable and compete with major walled gardens on tech. PlaceIQ’s media business is about 2% of Zeta’s overall revenue though, which he said was healthier so the ad tech doesn’t have to support itself.
PlaceIQ’s advertising business is also more valuable within Zeta because it can be used to cross-sell different services within the cloud suite. With Sizmek, for instance, Zeta can reduce marketer data fees by bundling its own data cloud and services, or, vice versa, reduce the DSP fee for customers that already license its data.
“It gives us a very strong proposition for that business,” Steinberg said. “It’s like, ‘Would you like fries with that? Oh, and by the way, they’re free.’”
