The companies started merger talks in mid-summer with the idea that greater scale was needed in the mobile pure play ad platforms.
"We wanted to build buy or partner on the SSP side," Barrett said. Nexage was an especially good fit since it let Millennial extend its own existing relationships with mobile app developers (60,000 or so) with Nexage's strength in mobile web. "With mobile web comes different ad units. It creates a really compelling exchange platform where buyers are going to get access to a wide breadth of mobile inventory that is not easily found on one platform."
But a larger motive was to bring scale to mobile ad tech. "It was the whole concept of bigger is better, the idea of us being able to combine data from our publishing partners," Barrett said.
The merger will support Millennial's developers with an SSP capable of exposing their inventory to a wider range of demand sources. Nexage boasts connections with 225 programmatic buyers and networks, including Apple's iAd, Facebook Audience Network and Google’s Admob.
One critique that has been leveled against Nexage is that a large percentage of the inventory in its exchange is not associated with valuable data. Barrett pushed back against that point of view. "Their business in the private exchange area has grown rapidly," he said. "That business is now a significant piece of their revenue equation."
But even granting that a sizeable portion of Nexage's inventory pool has been "dumb" impressions, Millennial may be able to do something about that through its profiles of some 65 million mobile users, which live in its data management platform. The combination of that DMP, along with an SSP and demand-side platform, allow Millennial to support retargeting, audience extensions and cross-device attribution, Barrett said.
"If you look at the data that we extract from our SDK footprint, that's one of the big appeals we bring from this combination," he said. "We're able to wash this inventory with valuable information. It's going to be one of the most data-rich exchanges for mobile out there."
One casualty of Millennial's Nexage buy could be its close relationship with AppNexus. One year ago, AppNexus and Millennial tied up to create a mobile exchange offering dubbed Millennial Media Exchange. The partnership gave Millennial a good story around programmatic trading, but arguably did more for AppNexus, which has sometimes been seen as a mobile laggard. Barrett claims AppNexus remains a strategic partner.
"It's fair to say the acquisition gives us an owned and operated exchange," Barrett said. However, "the Open AdStream acquisition [announced Monday] is interesting. We've not made any pledge to get into the publisher ad-serving business beyond our current footprint. And there are cross-screen opportunities. AppNexus will be a buyer on our platform, and likewise our DSP will probably be a buyer on their platform. "
LUMA Securities advised Millennial Media on the deal, and GCA Savvian supported Nexage.
At AdExchanger's Programmatic I/O conference in San Franscisco last spring, Barrett appeared onstage with Nexage CEO Ernie Cormier. Remarkably, they were also joined by AppNexus President Michael Rubenstein. Here's the video from that session: