Rocket Fuel set to acquire competitor X+1

Move is in-step with changes in how DSPs work with clients

If Rocket Fuel‘s acquisition of its competitor, X+1, is approved by regulators, it will fill a gap in the demand-side platform’s offering and perhaps brighten its outlook as a publicly traded company as clients continually shift how businesses operate in the programmatic space.

The deal is valued at approximately US$230 million, with Rocket Fuel paying $100 million in cash and providing 5.4 million shares of its common stock.

Rocket Fuel’s demand-side platform (DSP) services allow advertisers to manage their programmatic buying across online ad exchanges and other supply sources. X+1 competes in the same sphere, but is known for its integrated data management platform (DMP), which enables marketers to collect and analyze a large body of data to improve audience targeting.

“In an ecosystem where data costs can eat up a large percentage of digital media spend, it is no surprise that Rocket Fuel is looking to capture more share of total budgets by collecting those data fees, and the margins that go with them,” said Matt Sauls, co-founder of Toronto-based DSP SiteScout, in an interview with Media Post. “With this goal in mind, an established player like X+1 is one of the few options for mature DMP technology.”

Many in the industry also believe X+1′s direct relationships with advertisers will help Rocket Fuel shed its reputation as a “black box” operator; the company’s competitors are increasingly leaning away from Rocket Fuel’s “managed” business model to allow clients more direct control over their buying.

In July, Rocket Fuel made its platform available to North American agencies and advertisers on a self-serve basis for the first time, signaling that it too sees where the industry is heading and is adjusting its model. In a release on the X+1 acquisition, Rocket Fuel said the merger would accelerate its “entry into the digital enterprise marketing [software-as-a-service] market.”

The deal was announced Aug. 5, the same day Rocket Fuel announced its quarterly financial numbers. While much of the financial news was good ($92.6 million in revenues, a 70% increases year-over-year, and an 85% increase in new customers) the company revised its full-year revenue expectations below Wall Street’s consensus estimate. As a result, investors ignored the X+1 news and dropped the company’s value by more than 20% in after-hours trading.

Advantage Articles

Influitive’s staff crowdsource their way to victory

'Leadstarter' campaign makes referral competition more personal

More than half of video ads run cross-device (infographic)

Videology report shows cross-device beats 50% benchmark for first time

District M adds header bidding for publishers

New features help pubs put their best inventory in programmatic

Polar forms group to ponder the future of publishing

Publisher 2020 initiative brings together execs from around the world

Yahoo Mail starts blocking ad blockers

Email client forces some users to disable software in search of better ad revenues

Lightspeed POS breaks into ecommerce

Montreal mobile point-of-sale platform acquires Dutch online retail company

Eyereturn tracks passions with segmentation demo

New infographic tracks sports, music and recreation preferences

Blue Ant brings Tubi TV OTT network to Canada

Free streaming service is supported by ads

Acuity, Juice and Addictive make Deloitte Fast 50

Three programmatic firms achieve more than 500% 4-year revenue growth