This will gain WPP approximately 15 per cent stake in AppNexus and a seat on the board. Both parties declined to disclose the total value of the deal.
AppNexus, a platform specialising in real-time online advertising, is considered the world’s largest independent ad tech provider with net revenues above US$100 million. The company is currently valued at $1.2 billion and delivers more than 30 billon ad impressions per day. It has 10 offices located around the globe including in Singapore and Sydney.
“Asia is an exciting area of growth for AppNexus…," Brian O’Kelley, CEO of AppNexus, told Campaign Asia-Pacific. "We expect our business in the region to continue to expand.” He declined to disclose the percentage of business the company transacts in Asia-Pacific.
WPP acquired Open Adstream (OAS) in 2007 as part of the 24/7 Real Media acquisition. It is the second largest publisher ad server platform in the world, after Google. Following this transaction, the staff of XFP will join AppNexus’ global team of 600.
The addition of OAS, O'Kelley added, will grant AppNexus new capabilities in premium ad serving and will allow the company to “start to innovate in building a true programmatic ad server for publishers”. O’Kelley would not speak as to the combined number of ad transactions following the acquisition.
According to Brian Lesser, global CEO of Xaxis, the sale of OAS will allow the programmatic buying agency to “focus more intensely on core strengths of data management and proprietary media products”. This includes the Turbine DMP, its analytics suite, as well as reporting and optimisation technology. He added that the deal would also give Xaxis the room it needs to continue developing new products in video, mobile out-of-home and TV.
According to WPP, Xaxis is the largest programmatic media platform, handling more than $750 million media buys across 33 markets. It estimates, on the basis of current market valuations, that Xaxis would be worth more than $4 billion on its own, in comparison to WPP’s own market capitalisation of $27.5 billion.
For WPP, the deal gains the group a stake in “one of the strongest players in the ad tech space,” said Lesser. “[The deal] supports our commitment to ad technology solutions that are independent of the major media companies.”
WPP has been on an acquisition spree of late and has recently added social-media agency Teein to VML China, Mongolian ad agency MCS Holding to Y&R and UK-based digital agency Guardian Digital Global to Kantar.
The transaction between WPP and AppNexus is subject to regulatory approval and customary closing conditions, and is expected to close by year end.