Zeta Global on Friday said it reached a definitive agreement to acquire the technology and assets from ad tech company Sizmek, in a deal estimated to be in the neighborhood of $36 million.
Sizmek, which filed for bankruptcy on March 29, is a demand side and data management platform used by marketers to make programmatic ad buys. Zeta, meanwhile, operates in the CRM arena, offering brands first-party data on very specific consumer segments. For instance: The company claims that agencies can pull data from Zeta and create an audience segment for people who are interested in purchasing a new luxury car, live in the Midwest and are ready to buy in the next week.
“We know exactly who the person is and we know who they are,” says David Steinberg, Zeta Global CEO. “We have 2,500 data points on each person in our database, with 240 million active Americans in the U.S. today.”
Steinberg says the company previously made its money by offering agencies such first-party data segments, but once its acquisition of Sizmek is complete, it will provide that data for free and instead charge them for using its DSP to make ad buys.
“It’s a whole new business model,” Steinberg says. “We’ve always used our data to create and monetize our customers through our CRM software, but adding a programmatic platform and integrating our data into it is a massive shift for our company.”
Such a move would make ad tech darlings like The Trade Desk a Zeta Global rival, says Steinberg. “They have become the de facto new player in town and they’ve done an exceptional job,” Steinberg says in regards to his newfound competition.
But Zeta is trying to separate itself from the competition by offering first-data segments for free. Many DSP platforms do not have access to the amount of first-party data Zeta has and if they do, they currently charge for it.
The move is meant to differentiate Zeta’s DSP service at a time when much of the industry views these platforms as a commodity, says Steinberg.
The deal is subject to bankruptcy court approval, but Zeta says it will close “later this month.” Steinberg added that Sizmek’s 200 employees will be consolidated into Zeta’s operations in New York, Silicon Valley and London. But he added that the company will still keep Sizmek’s offices in Prague, Michigan and Connecticut, while Sizmek continues to operate its service for its users under its existing terms.
Vector Capital acquired Sizmek for $122 million in August of 2016. It then went on to acquire ad tech company Rocket Fuel the following year for $145 million. Prior to that deal, Rocket Fuel CEO Randy Wootton told Ad Age that an “ad tech armageddon” was imminent, adding that ad tech companies were “going to consolidate, get rolled up and disappear. And you’re going to see this shake out because the ecosystem and the value chain cannot split up the dollar 4,000 ways.”
[from http://bit.ly/2VwvxLm]
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