Customers said that they appreciated the platform services, but several said they suspected it "never made them any money."
Sources also said that while ad serving was the primary service CDS performed for them the past few years, it initially also provided campaign optimization functions.
Adify was acquired by Cox Enterprises, through its subsidiary Cox TMI, a brand that was eventually erased as its parent company decided to combine it with the digital arm of Cox Cross Media. Adify was cobbled together into CDS, which itself was an arm of yet another subsidiary, Cox Reps. The move was done to reduce “redundancies" and, as you can see, avoid confusion.
The Atlanta-based media company, which owns the Atlanta Journal Constitution, as well as TV and radio stations, paid $300 million, plus earnouts, for Adify. About three years ago, Adify began working with its Cox Enterprises sibling AutoTrader.com on a vertical ad net targeting in-market car shoppers. As Adify began handling digital chores for other parts of Cox, the company decided it was time to fully blend the brand in.
But the past few years has not been kind to the ad network model as online media migrated toward exchanges. When Adify was started in 2006 by Larry Braitman and Richard Thompson, who were among the pioneers of the ad network model during the days before the dot-com crash in 2000 with Flycast, it was seen as a challenger to another self-serve ad network that appeared to be gaining traction at the time, adBrite.
Coincidentally, last month, adBrite itself was in the process of shuttering its ad exchange and attempting to sell off its marketplace business and its intellectual property.
The apparent failure of these ad tech businesses, which had once flown so high in the eyes of investors and industry observers, highlights the difficulty faced by ad tech companies pressured to adapt to a rapidly changing marketplace, especially once its founders and early leaders have left for other opportunities.
As one serial entrepreneur, who also asked not to be named, told us, the past four years of ad tech deals have often not fulfilled expectations. Examples include Yahoo's operating of early real-time bidding platform Right Media, which ought to have been bigger than it is, to Akamai's surrender of its experiment in the ad business with Acerno to MediaMath in January, to Microsoft's inability to make something more out of Atlas, which is now being given another try in Facebook's hands, in a deal announced last week. "It seems like, other than Google, which has carried DoubleClick, YouTube, Invite Media, AdMeld and many other smaller acquisitions to new heights, everyone has ultimately f'd up whatever they buy," the entrepreneur observed.
However Tolman Geffs, co-president of media investment bank The Jordan, Edmiston Group, Inc., offered several examples of what has gone right, such as DoubleClick’s acquisition of Klipmart, an early video ad server, prior to Google. He offered that deal as a case study for both sides of an M&A transaction.
"The key to success? Careful integration and human resources planning before the deal closed," Geffs said of DoubleClick/Klipmart. "Management and bankers spent as much time on this as on deal terms, although the two were linked given the additional incentives baked into the transaction structure."
Adding that "this will sound very self-serving coming from a banker," Geffs estimated that "the last 10-20% on price is insignificant in comparison to the importance of thorough integration planning before the deal closes. When you look back on transaction success (and impact on the careers of the buyer execs who sponsor the deals), the last few million bucks does not matter – the acquisition either was a success and well worth the money, or it would have been a disaster at half the price."
Still, those lessons are a little late for CDS and what became of Adify. It's also a little late for its customers -- and employees, though it's not certain how many jobs will be affected by the shuttering of the platform business. In speaking with a number of CDS platform customers, there was a mix of surprise and inevitability with the closing down of the platform.
"I think we all saw it coming at some point -- but you never know how long a giant corporation like that is willing to let something coast along," said one customer, who asked not to be identified, echoing the sentiments from others we've heard from. "We have heard from our customers that moved over that the platform really stagnated after the purchase and that new features weren't being added, or old problems resolved."
For the most part, the news is also being seen as a hardship for some, who say that 60 days isn't a lot of time to find a new home for their business. "Moving an ad network, which can consist of hundreds of sites, isn't an easy task. You have to coordinate with all of those publishers to update their ad code, move your campaigns, etc."
But there are still companies eager to pick up where CDS is leaving off.
In a recent blog post Adzerk, a publisher-side ad technology company, is offering a "disaster recovery program" for CDS customers left in the lurch.