What’s the news?
Amobee, who are owned by Singapore based telecommunications company Singtel, have recently purchased the previously independent DSP TURN, for a cost of $310 million dollars. Before the purchase, TURN’s USP was actually based on their vision of being an independent ad-tech company who owned their DSP, DMP & analytics platform. However, as of Thursday 23rd of February this vision has changed.
Whilst it may seem like a surprise sale, there have been signs going as far back as 2015. 18 months ago TURN had a slightly rocky time, laying off 14% of it’s staff, attempting to pivot the business into a SaaS model (software as a service, that would have favoured brands over agencies) and hired a new CEO Bruce Falck who tried to turn the business around (like what we did there? J). Bruce wasn’t always on the pulse though, claiming that TURNs main competitors do not have DMP like TURN does – infact both mediamath and The Trade Desk do.
Why is this happening?
This purchase also follows the recent acquisition of Tubemogul, the independent video DSP, by Adobe in November 2016 for $540 million USD, adding a buying platform to the Adobe marketing cloud suite. Salesforce also bought Krux last year – leaving very few independent DMPs left. Although not a purchase, WPP has also invested heavily in AppNexus (DSP & SSP). So within the AdTech industry there is a fair amount of tech-consolidation and co-operation going on right now. It signifies a move that a single technology platform alone (e.g. DSP) is no longer good enough. The data behind advertising is crucial, and what drives larger companies to invest and purchase demand side platforms (DSPs) is to compete with the full-stack partners such as Google.
NB: Full-Stack is where the ad-tech company can offer an end-to-end solution from buying, measurement and selling. For Google this would be Doubleclick Bid Manager (DSP), Doubleclick Ad Exchange (sell side), Audience 360 (DMP) as well as Doubleclick ad Manager (ad-Server).
What does this mean for advertisers?
A bigger focus on mobile is obvious, but it doesn’t mean TURN will be forgetting desktop anytime soon – or even video inventory. In fact they have invested in their video product heavily, and prediction is that they will continue to do so. As Signtel also owns Optus here in Australia, plus 3 other number one mobile phone providers in Asia, this acquisition now has a lot of powerful data behind it to power smarter advertising and decision making. TURN has a powerful analytics suite, of which Amobee will be taking advantage of.
For one advertiser in particular, Optus, it’s likely they will use the TURN tech stack including TURNs DMP which will benefit from an injection of large amounts of customer data.
The partnership of ad-tech & mar-tech continues…
There are certain similarities here to US based Verizon buying AOL, and then Yahoo last year, that are more relevant for us here in Australia with Singtel owning Optus also. We expect Optus to roll onto a full TURN stack in the medium future, which we expect to be the catalyst for significant product enhancements within the DSP.
Product: This purchase combines the mobile expertise of Amobee and the programmatic expertise of TURN to create a powerful mobile DSP. TURNs DMP will likely be on-boarded by Optus which will enrich the learnings and data for TURN. TURNs analytics capabilities will no doubt power Amobees analytics
Client base: It’s likely that TURN will benefit from Amobees existing client base that operate on an ad network basis right now, the move will signify greater transparency that TURN offers.
This purchase continues on the current trend of ad-tech + mar-tech consolidation. This will definitely not be the last partnership we see this year, nor the biggest. The market is at a stage where the USP of being an independent trading desk will be the clear distinguishing factor in a world where AdTech companies are keen to be a one stop shop and take on Google.
Well if you listen to Business Insider it’s either Appnexus, Mediamath or TheTradeDesk in the top 5 ranking. For comparison if you were looking to purchase:
- Mediamath: Monthly Revenue: $250mil NET. 700+ employees
- The Trade Desk: Monthly Revenue: $150 mil NET. 175+ employees
- Appnexus: Monthly Revenue $250 mil NET. 1,000+ employees
- TURN: Monthly Revenue: $150 mil NET. 350+ Employees
The Trade Desk are the fastest growing DSP at 7,000% YoY presenting an attractive acquisition. If anyone is going to buy AppNexus outright it would be WPP. Although Mediamath looks next on the cards with their large monthly revenue, they have a stronger desire to stay independent as it looks like the Trade Desk have too.