IgnitionOne CEO Speaks On Plans To Absorb Rubicon’s Buy-Side Biz

will-margiloff-ignitiononeRubicon Project’s foray into the buy side was brief: It’s shuttering Chango less than two years after the acquisition.

IgnitionOne, which spun off from Dentsu in 2013, is picking up Chango’s 40 to 50 clients from Rubicon Project and a handful of employees – but nothing else.

“The tech was not for sale,” IgnitionOne CEO Will Margiloff said. Instead, his company will migrate Rubicon’s clients onto its platform.

Margiloff declined to share specifics about the fees IgnitionOne would pay for those client referrals.

IgnitionOne, a 450-person company, will take on a “handful” of the account management team, he said. Having the same employees stay on will provide continuity for the marketer and agency customers.

In the short term, IgnitionOne will work with Chango’s buy-side clients to set up tags and make other technology adjustments. Long-term, IgnitionOne plans to sell these clients on the other parts of its offerings.

“Ninety-five percent [of our top 20 customers] buy multiple solutions from us,” Margiloff said. Sixty percent of IgnitionOne’s revenue comes from licensing tech and services around site optimization, data management, user scoring, SEM and email. Media revenue accounts for 40%.

Chango is purely a media play, functioning as a managed DSP and taking a margin on the media it purchased. In 2016, that strategy accounted for $41 million in gross revenue and $19 million in net revenue, a roughly 50% margin. Back in 2014, Chango posted $43 million in revenue, with data and media costs of $25 million.

Margiloff chalked up Rubicon’s divestment of the buy-side business to the difficulty of building up a two-sided market. “The hard decisions [for companies] are the focus decisions,” he said.

Although companies like Google, Facebook and AppNexus serve both sides of the market, size is key to success. “You need to have scale where one doesn’t matter over the other, and have the scale in resources to support both businesses,” Margiloff said.

Even with scale, “it creates some inherent challenges over time,” he added.

 

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