Contact: Scott Denne
Time Inc has scooped up Adelphic, which provides a platform for buying ad inventory in mobile apps, as the storied media company hedges its bets to make up for its declining print revenue. The acquirer plans to add Adelphic to its Viant division, which it bought last year to build out a targeted digital advertising business.
With Adelphic, Viant adds software that will enable it to push its vision of people-based ad targeting into mobile apps. Adelphic is one of the strongest pure mobile app platforms but operates in a challenging market. Despite the overall growth of mobile advertising and mobile audiences, few mobile advertising vendors have been able to scale well. Much of the revenue in the space has gone to Facebook and a handful of mobile ad networks.
Those advertisers seeking a self-serve platform like Adelphic have often turned to one of the cross-channel media-buying platforms. That cohort tends to be strong in web (both mobile and desktop). With today’s acquisition, Time will be able to offer reach into mobile apps, not just web, for their mobile campaigns. However, Time will face technical challenges in expanding its people-based targeting vision into mobile apps, where ads are targeted based on device IDs, not cookies.
Terms of the deal weren’t disclosed. We estimate that Adelphic finished the year with $13m in net revenue and would expect it to fetch no more than 3x that amount, given the challenges in the mobile sector and that StrikeAd, a peer, got just 1x trailing revenue in its sale to Sizmek last year. Time has been eager to extend into several new segments, although it hasn’t been eager to pay a premium – it picked up Viant largely by assuming the target’s outstanding debt (see our estimate of that transaction here).
In addition to building out a digital advertising offering that extends beyond its core properties, Time is pursuing several other opportunities to expand its revenue. It has invested in a studio to help advertisers develop content and it recently bought Bizrate, a survey and consumer analytics firm, as it enters the affinity marketing space.
LUMA Partners and Oppenheimer & Co advised Adelphic on its sale.
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