Millennial To Buy Nexage For $108M, Bolsters Programmatic

Aiming to ramp up its programmatic trading technologies, mobile ad firm Millennial Media on Tuesday announced the acquisition of mobile real-time bidding (RTB) exchange Nexage for $107.5 million in cash and stock. Under the terms of the deal, Millennial will pay about $22.5 million in cash and $85 million in stock, subject to certain adjustments.

Millennial said acquiring Nexage would bolster the company’s existing programmatic offerings in three key areas: providing a leading exchange that lets demand-side platforms and trading desks buy impressions via open auctions or privately; a supply-side platform (SSP) for publishers and developers; and an ad server publishers can use to run directly sold campaigns.

Nexage’s SSP in particular would help expose Millennial inventory to a wider range of demand sources since it has connections with 225 programmatic buyers and networks including the Facebook Audience Network, Apple’s iAd and Google’s AdMob.

As an independent mobile ad network, Millennial has faced an increasingly uphill battle to hold onto market share as Google and Facebook have come to dominate mobile advertising. The two companies combined are expected to control about 72% of worldwide mobile ad revenue compared to only a fraction (0.4%) for Millennial, according to an eMarketer estimate.

“Our vision is to create a full-stack solution that enables us to open the flow of impressions, operate a leading independent exchange and maximize the yield for our publisher,” stated Millennial CEO Michael Barrett. “The opportunity to integrate Nexage’s programmatic technology with our deep roots and heritage in agency relationships will uniquely position us in this fast-paced ecosystem.”

Last year, the company acquired rival mobile ad network Jumptap to better compete for mobile ad dollars and bolsters its automated buying capabilities for performance advertisers. Now Millennial is going further in that direction with the Nexage purchase. With AppNexus, the company introduced its own ad exchange last year, called Millennial Media Exchange, or MMX.

While the Nexage acquisition signals a diminished role for AppNexus, Barrett told AdExchanger the ad technology company would remain a key partner and a buyer on its platform. WPP yesterday announced taking a $25 million stake in AppNexus.

A Millennial spokesperson said it’s not yet clear whether the company will continue to maintain Nexage as separate unit and brand — or what role Nexage CEO Ernie Cormier would have following the merger. In a statement, Cormier said the deal would further Millennial’s goal of “creating a leading independent mobile advertising platform and vital programmatic marketplace.”

Boston-based Nexage had raised almost $20 million to date in venture backing from investors including the venture capital arm of telecom giant SingTel, according to CrunchBase. 

Millennial's stock was up more than 13% in early trading to $2.01 on news of the Nexage deal. 

Next story loading loading..