The Rubicon Project, an automated online advertising platform, announced an agreement Tuesday to buy online intent marketing business Chango for $122 million mostly in stock.
Chango of Canada will give Rubicon the ability to target advertisements based on a website user’s intent, which is inferred from search engine entries or the content a user is viewing. Intent marketing is a lucrative revenue stream for search engines like Google.
Chango takes the technology behind intent marketing and offers it to its customers without search engine partnership. Search engines such as Google pioneered intent marketing and have dominated this kind of advertising with products like AdWords, but Chango now competes with them.
“A lot of dollars have been focused on search to-date,” said Frank Addante, chief executive of Rubicon Project. “We are now able to take this technology and more dollars away from search.”
Chango’s technology uses publishers’ data to learn how users came to their website and what content they have been viewing. That technology will give Rubicon’s customers another way to sell their advertising inventory.
“You might search for something on a search engine, but you’re likely to land on a publisher that uses Rubicon,” said Addante. “50 percent of the top 100 websites are customers of our platform.”
Top publishers have shied away from selling their advertising inventory for intent marketing because of the low price they often receive from search engines. However, Rubicon believes there is opportunity in serving premium websites and advertisers.
“Our belief is that dollars will move to premium marketplaces,” said Addante.
Rubicon’s focus on premium websites has helped to drive up the average price of advertisements on its platform, from 36 cents per thousand views in 2013 to 67 cents in 2014.
Some of Rubicon’s premium customers include the Pangea Alliance, a programmatic advertising partnership formed in mid-March between the Guardian, CNN International, the Financial Times, and Reuters, with some advertising inventory from the Economist.
For its part, Chango’s customers include more than 60 of the Fortune 500 advertisers. According to the Deloitte Technology Fast 50, the company’s revenue grew almost 70,000 percent over the past five years.
Addante said the deal will likely close in the next 10 to 20 days. Chango’s 150 employees will remain in Toronto, Canada.
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