Though Thompson characterized 2014 as “a good year,” companies that went public in 2014 – like Rubicon Project, Matomy and TubeMogul – had mixed success. Supply-side platform (SSP) PubMatic seemed to gear up for an IPO in February, but nothing came of that initial sound and fury.
Israeli performance network Matomy pulled out of its IPO from the London Stock Exchange in April, citing a technicality, and resurrected its public aspirations in July when it sought to raise $70.1 million at a $347 million valuation. Initially, it had sought to raise $100 million at a $400 million valuation. In October, Matomy insiders sold a 20% stake of the company to Publicis Groupe.
Unlike Matomy, Rubicon’s IPO wasn’t cursed from the start. In March, it sought to raise $108 million at a $671 million valuation, and it stormed out the gate in April, debuting at $15 per share and shooting up to $20. Initial investor excitement stemmed from what Rubicon – largely viewed as a supply-side platform – could eventually be: a major tech player in video, mobile and on the demand side.
Certainly, the company has taken steps to expand its core competencies – its recent acquisitions of iSocket and Shiny Ads (see below) give it technologies to automate the direct sales process. Previously, it released 49bc, a product that focuses on direct-sold mobile inventory.
But video is another story, and Rubicon, in its most recent quarterly earnings call, scaled back its once-lofty video aspirations. At the time, its market cap, which Rubicon hoped during its April IPO would be $671 million, was $367 million. Nevertheless, Rubicon’s quarterly revenues have been strong and its market cap as of this writing was $586 million. Its stock has trended upward since mid-October and is now in the $16 range.
Video DSP TubeMogul has done well, despite an inauspicious beginning in July when it priced its shares at a cut-rate $7. One AdExchanger source wondered at the time if investor pressure motivated TubeMogul‘s IPO.
But since then, TubeMogul has a market cap of $685 million and its stock is in the $20 range. Its self-serve business was the source of considerable gains during its most recent quarterly, and the company is looking to expand its mobile and international footprint.
The challenge, going into 2015, is that many ad tech vendors play a game of me-too.
“They look at who’s done well before them and they try to model that marketing speak to advisers, the public marketers and the press,” Thompson said.
M&A Trends: Power To Data And Video
For many companies, the preferred way to cash out is to get acquired. And there are numerous ad tech and marketing tech players out there looking to build one-stop shops, and hunt for features to round out their stack functionalities.
In ad tech, consider Google, Facebook, AOL, Yahoo and Twitter. In marketing tech, consider Adobe, Salesforce and Oracle.
Oracle made a tremendous splash on Monday, revealing its intent to acquire Datalogix, adding it to the data exchange it inherited February through its BlueKai acquisition. Nielsen and Adobe were also rumored Datalogix suitors.
Other big data plays include Acxiom’s purchase of onboarder LiveRamp and Alliance Data Systems buying Conversant on behalf of its data marketing unit, Epsilon.
Certain features seemed particularly in demand in 2014, including DMPs (Oracle-BlueKai, Rocket Fuel-[x+1], Publicis-RUN and IgnitionOne-Knotice), attribution engines (Google-Adometry, AOL-Convertro) and video platforms (ComScore-FreeWheel, Facebook-LiveRail, Yahoo-BrightRoll, Telstra-Ooyala and RTL Group-SpotXchange).
There’s a snowball effect that helps decide which categories "pop" in any given year. A source noted that as a vendor in a specific bucket looks to sell – or as larger stack player look to acquire – it creates chatter. If one company buys a point solution, its competitors might begin to prioritize similar point solutions to stay competitive.
A lot of M&A activity happened in 2014 and Thompson anticipates more in 2015, as new entrants – like Accenture, IBM, Dell and HP – will start to build out marketing tech stacks.
“There’s a lot of cash on balance sheets in tech,” Thompson said. “There’s $500 billion across the top 250 public tech companies. They like any other company are searching for growth, and that will fuel M&A activity in startups.”
The following is a list of M&A activity that occurred in 2014. This list isn’t by any means exhaustive and it’s focused on ad tech companies, so we’re leaving out some major acquisitions, like Publicis buying Sapient for a cool $3.7 billion.
Additionally, the dates reflect the times at which the intent to acquire was announced, and not the actual closing date.
Oracle buys BlueKai for an estimated $350-$400 million. It inherits a DMP for its marketing cloud and used BlueKai’s data exchange as a linchpin for Oracle Data Cloud, which the company unveiled in July.
Google buys anti-fraud tech provider Spider.io and its founder, Douglas de Jager.
Resistance is futile for tag management provider Tagman, which is ultimately assimilated by its competitor Ensighten.
AOL’s Adap.tv buys PrecisionDemand, which mines set-top box data.
AppNexus buys Parisian viewability firm Alenty, its first of three acquisitions for the year.
Singaporean telco SingTel acquires ad network Kontera and cross-channel platform Adconion on behalf of its mobile ad solutions subsidiary, Amobee.
Twitter tries to make TV more social when it buys SnappyTV, a video clipping and distribution platform.
Twitter buys TapCommerce for an estimated $100 million.
LinkedIn buys B2B display ad platform Bizo for $174 million.
Ad network Rocket Fuel lifts off with its acquisition of DMP/DSP [x+1] for about $230 million.
ComScore bolsters its cross-platform fraud fighting with the purchase of cybersecurity startup MdotLabs.
Australian telco Telstra acquires a majority stake in Ooyala, a video analytics platform. Telstra previously owned a 23% stake for $61 million. It ups its ante with an additional $270 million investment, for a 98% stake.
Here comes a new challenger! Just when it seems that Google would buy the video game streaming platform Twitch, Amazon swoops in and buys it for $1 billion.
Here’s a doozy: Alliance Data Systems buys Conversant – formerly the ad network ValueClick – for a cool $2.3 billion. Most of the Conversant assets will be used by Alliance Data’s Epsilon subsidiary.
AppNexus buys Open AdStream from WPP Group’s Xaxis. As part of the deal, the agency holding company receives a $25 million stake in AppNexus, worth about 15% of the company.
This one isn’t a complete acquisition, but WPP Group buys 16.7% of media measurement company Rentrak for $98 million. Rentrak in turn gets Kantar Media’s TV measurement business in the US. It was WPP's second tech-for-equity swap in two months.
Ensighten slaps its acquisition tag on Anametrix, a multichannel analytics shop.
Matomy buys mobile programmatic ad platform MobFox for $17.6 million.
Publicis Groupe buys RUN DMP for an undisclosed sum, on behalf of its media agency Starcom MediaVest Group.
MediaMath acqui-hires ad tech startup Rare Crowds. Rare Crowds founder Eric Picard joins MediaMath as its VP of strategic partnerships, focusing on the build-out of private marketplace products.
After a month of rumors, Yahoo acknowledges it’s putting its Alibaba money to use and buying video ad network-turned-platform BrightRoll for $640 million.
Rubicon Project hits a double when it buys iSocket and Shiny Ads, two ad tech companies that focus on automating direct deal processes. The total cost of the deals is $30 million, though sources think the bulk of that comes from iSocket.
AppNexus buys cross-device ad tech startup MediaGlu, bringing its yearly M&A activity to about $200 million.
Oracle buys Datalogix, which links online activity to offline shopper actions. Datalogix, a major Facebook partner, will fold into Oracle Data Cloud. Nielsen and Adobe were also rumored to be in the running for Datalogix.