The ad management space is consolidating. Freestar acquired Sortable Wednesday in a deal that expands Freestar’s inventory by 30% and increases its staff from 90 to 130 people.
Freestar, which is profitable, self-funded the acquisition. Terms of the deal were not disclosed.
The acquisition is “completely additive” on multiple fronts, Freestar CEO Kurt Donnell said.
The two companies have zero client overlap since ad management firms form exclusive relationships with publishers to manage their advertising. With the deal, Freestar will approach 1,000 publisher clients. All of Sortable’s staff will join Freestar.
Sortable also built unique tech that will be added to Freestar’s toolset for publishers, including sophisticated price flooring capabilities and an exchange that publishers can use.
Becoming a more scaled player will also help as the industry transitions to new forms of identity. Freestar is running beta tests with multiple identity solutions. Post-acquisition, it will have more engineering resources to deploy for testing that will benefit a greater swath of publishers.
The acquisition “gives us more bandwidth to attack [addressability] and be more impactful to the partners we work with,” Donnell said.
DSPs and SSPs are more willing to partner closely with ad management firms than they have been in the past. “In the last two to four years, SSPs and DSPs are leaning into [us], whereas there was a bit of skepticism of the ad-network-type situation” in the past, Donnell said.
There is growing recognition among DSPs and SSPs that the scale of a company like Freestar makes it more seamless to work with publishers and easier to form data partnerships. Plus, most identity solutions become more effective when they work with scaled publishers – or groups of publishers, in Freestar’s case.
Culturally, the two companies were “wildly similar,” Donnell added.
Though Sortable currently has an office in Toronto, Canada, Freestar is undecided if that office will remain open. Freestar’s workforce went from 60%-70% remote to 100% remote during the pandemic, during which time the company added 50 people. And it plans on keeping a remote culture, which gives it a recruiting edge.
The acquisition is Freestar’s second in just over a year. Last July, it acquired a header-bidding-style tech, Chocolate, for app publishers. Since the acquisition, Freestar has exceeded all its targets for app revenue, Donnell said, even as Apple tightens its privacy reins.
Freestar plans to take six to eight months to do a thoughtful integration. Publishers using their tech should see a revenue lift as the company integrates features, as well as more robust reporting.
Its ultimate goal? Be a “one-stop shop for monetization” across desktop, mobile web and in-app ads for publishers.
