Centro , a tech firm that automates parts of the ad buying process, is acquiring SiteScout, a Toronto-based demand side platform. The purchase price is nearly $40 million in cash and stock, according to an industry source.
The acquisition, closed yesterday, was completed with the intention of integrating SiteScout's technology directly into Centro's buying platform. The combination of the two under one roof will give digital ad buyers access to both exchange inventory and direct-sold offerings within a single interface.
The move is yet another sign of real time bidding's rising importance in today's digital advertising industry. With this acquisition, Centro, founded in 2001, declared itself no longer willing to stake its future on the human side of digital ad buying. Rather, it felt compelled to spend tens of millions of dollars to join the RTB ecosystem, which is expected to grow 73.9% this year, according to eMarketer.
"As programmatic has grown it's become really important for us to have a strong platform in that space as well as guaranteed," said Centro CEO Shawn Riegsecker in an interview with Ad Age.
The deal is also the latest acquisition of a so-called "demand-side platform," which allows advertisers to reach audiences by buying ad inventory out of ad exchanges in real time. Google bought Invite Media in 2010; Centro competitor Mediabank bought AdBuyer.com in 2011. Some big brand advertisers are building their own DSPs to connect directly with ad exchanges -- and cutting out their agencies in the process.
By giving buyers the ability buy direct-sold and real-time advertising in a single platform, Mr. Riegsecker said the advertisers would enable them to place the performance of the two side by side and adjust accordingly.
"The industry is so siloed, nobody is actually taking their RTB data and their direct data and easily monitoring what's performing and what's not," he explained. "You'll be able to easily move dollars from one to the other based on how things are performing."
Donnie Williams, chief digital officer for Horizon Media, said the move was a good one from his perspective. "Centro's vision to develop a single platform for all inventory and channels makes a ton of sense," he said.
The combined company is expected to hit over $250 million in revenue this year. It will absorb all of SiteScout's 33 employees, including its CEO, Paul Mokbel, who will become Centro's managing director in Canada and vice president of engineering.
Centro also plans to double SiteScout's engineering team and use its own sales relationships to bring SiteScout, until now a self-service demand side platform catering to smaller buyers, in front of bigger clients.
Whether the rest of the industry follows Centro's lead is hard to tell. But it's likely to be a wake up call to those playing on just one side of the fence. "The question is what company can get there the fastest," said Mr. Riegsecker of a unified system. "When I look at the industry I believe Centro is in a leadership postion to actually fullfill that mission."