AppNexus has acquired Yieldex, whose platform provides publishers with analytics, forecasting and sales management tools. The deal might help strengthen AppNexus' relationships with media sellers at a time when direct deals between marketers and publishers represent a growing portion of the programmatic ad pie.
The Wall Street Journal placed the deal's value at approximately $100 million in cash and stock, a figure confirmed by AdExchanger sources.
Eight-year-old Yieldex lets publishers forecast, price and sell their inventory. Its customers include The New York Times, Expedia, Pandora, CBS Interactive, Univision and The Weather Channel. The company's YieldexDirect product, rolled out in Spring 2014, helps those publishers handle direct programmatic sales to agencies and marketers, and more than 20 publishers including Hearst Newspapers now use it exclusively to manage their so-called "automated direct" deals.
"For us this is about, how do you build a better ad server," said AppNexus CEO Brian O'Kelley. "An ad server has to handle things like yield. Most of what publishers are doing every day are deals. The programmatic proxy for direct deals is another hack around the process and technology that's been doing this for almost 20 years now."
With the acquisition, AppNexus's publisher business unit grows from 225 employees to nearly 300.
While the vast majority of Yieldex's revenue comes from long-standing product Yieldex Analytics, focused on inventory forecasting and pricing, CEO Andy Nibley says automation of direct sales is rapidly accelerating.
"We can see that publishers and buyers use of the system is increasing every day," he said. "We can see traffic going up and we think it's the beginning of a tsunami of activity in automated guaranteed and other programmatic direct channels."
Yieldex's annual revenue growth has averaged 40% over the past several years, Nibley told AdExchanger in December. "It’s a software-as-a-service business, so we have 65-70% in gross margins, which is nice," Nibley said. "We’ve broken into profitability [in 2013], a year and a half ahead of schedule.”
The transaction comes in the wake of AppNexus's acquisition of an ad server, Open AdStream, from its prior owner WPP Group. As part of that purchase, which valued OAS at about $155 million, WPP took an approximately 15% stake in AppNexus. AppNexus is valued at approximately $1.2 billion today. O'Kelley is believed to hold about 17% of the company, according to sources.
O'Kelley said the Yieldex product suite plugs nicely into both OAS and its homegrown buy-side programmatic guaranteed product, Twixt.
LUMA Partners advised Yieldex on the deal.