Impact Radius is bringing fraud detection in-house with the acquisition of Forensiq.
The deal, announced Tuesday, helps create what Impact Radius CEO Per Pettersen calls “a system of record with built-in fraud detection.”
Forensiq and Impact Radius are keeping the terms of the transaction secret other than to note it was a mixture of cash and stock.
“A large number of data points in the consumer journey come from bots,” Pettersen said. “And if you’re going to have a system of record and a method for attribution, you don’t want to confuse bots for something real.”
This is Impact Radius’ second acquisition in less than a year. The company bought Clearsaleing, eBay Enterprise’s attribution unit, in December.
Impact Radius, which competes with the likes of Adobe and Rakuten, was founded in 2008 by the same guys (including Pettersen) who started Commission Junction, Savings.com and LeadPoint. In addition to its recent $30 million round, Impact Radius raised a $6 million Series A in 2010. Clients include Ticketmaster, Tommy Hilfiger, Cabela’s and Shutterstock.
Forensiq’s 45 employees will be added to the Impact Radius group, bringing the overall headcount to more than 275.
Impact Radius describes itself as a SaaS marketing platform that tracks consumers across their journey, combining top-of-funnel stuff (ad impressions and site-side analytics) with more downstream activities (conversions and offline events).
Baking fraud detection, viewability and brand safety tech right into a digital marketing stack is something advertisers have been asking for, Pettersen said.
“We see this as a combination of our marketing technology overlaid with a cutting-edge ad tech capability,” he said. “CMOs want an integrated solution – a platform versus a point solution.”
Forensiq CEO David Sendroff sounded a similar note.
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“There’s so much more happening beyond the impression,” Sendroff said. “Our technology is good at invalidating low-quality traffic, but having the ability to follow the customer all the way through the transaction in one place, that’s powerful, and it’s the direction the industry is moving in.”
Although the two companies will integrate their technology over the next six months, Forensiq is going to keep its brand and remain a mostly independent entity under the Impact Radius umbrella. Day-to-day operations within Forensiq and existing client relationships won’t be affected, Sendroff said.
Forensiq, which was founded in 2010, had considered raising its first-ever round of funding when the Impact Radius deal materialized, Sendroff said.
Most of Forensiq’s direct competitors in the space have raised tens of millions of dollars including $67.5 million for Moat, $76.8 million for Integral Ad Science and $46.5 million for DoubleVerify. Forensiq’s growth has been organic.
Impact Radius plans to invest in Forensiq’s R&D road map with talent – the duo will combine their data scientists into a single team of 70, which is almost double Forensiq’s entire headcount of 45 – and with cash from the $30 million private equity round Impact Radius closed in early June.
“This just made sense to us,” Sendroff said. “We’re not looking to dabble in component parts.”
At the top of the R&D list is greater investment in AI-enabled machine learning tech to uncover fraud tactics as they develop.
“We’re focused on building our customer journey analytics and capturing consumer touch points,” Pettersen said. “But we also need the ability to filter out, analyze and score touch points so we can eliminate nonhuman traffic. We need to make sure our learnings aren’t based on bot traffic.”
Which is a valid concern. But why buy rather than partner? Impact Radius and Forensiq had already been working together since 2011.
According to Sendroff, the closer you are to the algorithm and the source of the data, the better.
“If you build your own algorithm for attribution, for instance, and there happens to be some sort of problematic input, you can go back in and look at the source to see why things are being flagged,” said Sendroff. “Third parties can often become a black box where you just have to trust whatever they’re saying.”
Speaking of third parties, one might wonder if Impact Radius owning Forensiq compromises the latter’s independence. Marketers and their agency partners are far from jazzed about foxes guarding their own henhouses.
But Pettersen said it isn’t really an issue because Impact Radius doesn’t sell media.
“We’re agnostic from a media standpoint, so we’re not like a media company that’s scoring itself,” he said. “We’re looking at this as the opportunity to own a trusted system of record for brands and agencies. It’s important to them and it’s something that we want to control as part of our solution.”
