As it finalized its $145 million acquisition of Rocket Fuel on Wednesday, Sizmek named Mark Grether to take over as CEO.
Simultaneously, the company said it would sunset the Rocket Fuel brand and integrate its DSP and DMP assets into a single demand-side stack under the Sizmek name.
A co-founder and former COO of WPP Group-owned Xaxis, Grether was brought on as Sizmek’s executive chairman in February, around the time previous CEO Neil Nguyen left the company.
“I’d argue we’re just at the beginning of this consolidation in core ad tech categories,” Grether told AdExchanger. “Players who survive now will be those with global scale and who have the resources to support that scale.”
Since its founding in 2008, Rocket Fuel has, for good or bad, embodied the fortunes of the advertising technology industry: the fruits of automation, the post-IPO surge and fall from grace, the ongoing transition from advertising network to advertising platform. Folding into Sizmek, backed by the private equity firm Vector Capital, is a fitting end to that story.
Advertisers and agencies that previously worked with six to eight DSPs are cutting those numbers dramatically, Grether said, and the vendors holding their seats at the table are those that can fill every category an advertiser needs.
Thus Rocket Fuel and its 2014 purchase of the DMP [x+1] build on Sizmek’s existing technology assets in the areas of ad serving, rich media, creative tech and pre-bid targeting technology. In all, more than 10 discrete ad tech companies (including Eyeblaster, EyeWonder, Mediamind, StrikeAd and Peer39) have been rolled up under Sizmek.
“The questions aren’t about what DSP is better anymore, or about winning a single category,” Grether said. “It’s about what’s the best stack.”
The integration of Rocket Fuel into Sizmek’s stack should take six to nine months, he said. Once that integration is complete, the Vector-backed Sizmek plans to turn its attention to connected television technology and improved attribution and analytics capabilities.
“We have the luxury of being backed by capital that can put those pieces together if needed,” he said. “There’s a demand in the market for a full, independent ad tech stack that represents a lot of room to grow.”
Rocket Fuel’s acquisition is also part of a broad trend of ad tech stocks exiting the public market. Sizmek itself was taken off the public market after Vector bought the business last year, and mar tech stocks Neustar, Marketo and MaxPoint all stopped trading after sales to private equity firms.
Moving away from the market, and the whims of Wall Street investors who may not have an interest or expertise in ad tech, is one of the most attractive features of the private-equity consolidation plan, according to Grether.
“We have a longer time horizon than anyone on the public markets,” he said, citing quarterly earning reports and the need to prioritize investor metrics like EBITDA (earnings before interest, tax, depreciation and amortization).
Without those pressures, Grether said, Sizmek can “invest in a more strategic way around where we think the market is going to be.”
This post was syndicated from Ad Exchanger.