Rubicon Project is closing its intent marketing business, which it entered in 2015 through its $122 million acquisition of Chango, according to a filing with the US Securities and Exchange Commission (SEC). IgnitionOne will pick up Chango’s clients and some of its employees in return for a fee from Rubicon Project.
Rubicon Project said the intent marketing business generated just $41 million in GAAP revenue and $19 million in non-GAAP net revenue in 2016. That indicates Chango ran with a high margin on media – a business model that has received scrutiny from agencies and brands who want transparency and media dollars to go to publishers, rather than intermediaries.
Chango's shuttering isn’t completely unexpected. During Rubicon Project’s last earnings call, CEO Frank Addante said Chango “didn’t work out exactly as we thought. … We probably wouldn’t have invested in that asset to the level that we did.”
Rubicon Project will close its office in Toronto, where most of the intent marketing staff worked.
“These actions will enable the company to increase focus on growth areas, such as mobile, video, orders, header bidding and the recently announced consumer initiative,” Rubicon Project stated in an 8-K filing with the SEC.
Rubicon said shuttering Chango will cost $8 million to $11 million in customer relationships and $500,000 in employee termination benefits.
More to come.