The 23-person team at nToggle will join Rubicon Project and the company itself will close.
NToggle used machine learning to automatically filter out available impressions that weren't relevant to marketers making ad buys through header bidding tech -- culling as much as 80% of the flood.
While header bidding is known to increase revenue for publishers by letting them take bids from multiple pools of buyers at once, less-known is the strain it puts on platforms for buyers. The tech can increase the amount of impressions seen on demand-side platforms by as much as 100% or more, many of them duplicates.
Accomodating the strain requires a significant investment by DSP operators, which can spend anywhere from hundreds of thousands to tens of millions of dollars simply to do business in the header bidding era.
Rubicon Project CEO Michael Barrett, who joined the company about four months ago, said it was eye-opening to discover the disruption that header bidding had wrought on the ad-tech ecosystem.
"We used to have a very enviable position where we had proprietary access with certain inventory from top-tier publishers," Barrett said. "Many of those publishers have now chosen to go with multiple exchanges because it delivers greater revenue."
"It soon became apparent that multiple exchanges were showing the same impressions so we set on early to look for ways to differentiate our services so we could help buyers," he added. "We feel the current climate is not sustainable and that buyers aren't going to buy from six or seven different sources that are all showing the same inventory. As marketers collapse the number of exchanges they buy from, we sure as heck want to make sure that we're one of them."
The move by the freshed-faced CEO comes nearly a year after previous CEO and co-founder Frank Addante told investors that his company was late in adopting header bidding technology. As a result, Rubicon's stock quickly dropped 32%. Since then, the stock has fallen roughly 63% to $5.07 a share.
The so-called acqui-hire by Rubicon Project might be one of several. The company should have somewhere in the neighborhood of $159 million in cash reserves following its acquisitions of nToggle.
"A big talking point has been our balance sheet," Barrett said. "We are going to aggressively take advantage of that balance sheet and if we see an opportunity to act on it, we will."
NToggle's tech will allow marketers to remove nearly all noise when making ad buys, Adam Soroca, founder and CEO of nToggle, said.
"Buyers can set specific parameters so they can target 'iPhone users in Boston on ESPN and New York Times,'" Soroca said. "We knew early on that machine learning would play an important role. There are so many impressions that it is not a human problem -- things change too fast. The only way to solve this problem at scale was through sophisticated machine learning."
Rubicon Project is due for its next earnings call August 1.