Tapad / Telenor Acquisition

Tapad was recently acquired by Telenor for $360M. Who is Tapad? Who is Telenor? Why would it buy Tapad?

 

At its heart, Tapad is a cross-device data platform. They tried to help marketers match the same user between different devices. They monetized this in a number of ways, but primarily by charging people to use this data to buy media. The company was founded in 2010, and in March 2011 had a "legendary" seed round, in which nearly every ad tech angel investor participated (https://www.crunchbase.com/organization/tapad/investors). It's noteworthy that Tapad was largely conservative with their fundraising, only needing $36M or so.

download (4).jpeg

Their primary competitors are Drawbridge, Blue Cava - and some DSPs that have strong proprietary plays, including RocketFuel, MediaMath and Adelphic, as well as Google and Facebook. The base of Tapad's business is collecting a "deterministic" or "true" set of data. A canonical example might be partnering with the NY Times to get login data for users across different devices, and map that user with access on the desktop and mobile device. From this deterministic base, Tapad extends out using probabilistic tactics to expand reach while maintaining a high confidence. In this sense, the core of their business was in the data business, notwithstanding their active presence in the media market. Given that, and given the strategies of various acquirers, one might have expected Oracle, Adobe, or maybe Salesforce to be the most likely buyers. Facebook wouldn't necessarily need their data, but might be interested in taking a potentially competitive data set off the market.

download (5).jpeg

 

So Telenor. I personally hadn't heard of them before. But they're a larger Norwegian telecom. The CEO of Tapad is, I believe, Norwegian (he's definitely Scandinavian). “With the acquisition of Tapad, Telenor Group is taking a position within the rapidly growing market for advertising technology, and securing important competence within digital marketing and analytics. I believe significant value can be created from applying marketing technology to improve the digital capabilities of our core telecom business. This will improve our understanding of customer behaviour, and supports building a platform for other business areas,’’ says Sigve Brekke, Chief Executive Officer of Telenor Group, in a statement.

There appear to be a couple trends in ad tech. Some of the older, traditional acquirers are losing their mojo a bit (Yahoo, Twitter, AOL) - but a whole new crop of company are joining the space with a renewed vigor. Specifically, telecoms are expanding into the media space - first with a spate of traditional media acquisitions over the past 10+ years, and now increasingly into the advertising technology space. This includes Verizon, Comcast, Telenor, Singtel, among others. As an aside, we're also seeing traditional media companies enter the space - including News Corp (buying Unruly), Bertelsmann (SpotX), Sky (DataXu investment), among others.

This contradicts some of the public market trends, and generally speaks to the idea that simply building a good, profitable company without raising too much money is a sound business strategy.

Cross Device Identification

The quick overview is that the 2015 Millenial uses multiple devices, but is the same person. Behavioral patterns on the laptop, phone, tablet, work computer etc all combine to form a single addressable consumer. If you look at a pair of pants at home, the marketer doesn't care that you're on your phone - they want to target you with those same pants.

But that's easier said than done. How do they know that your phone represents the same exact person? That's where companies like TapAd (probably the market leader), Drawbrid.ge and others come in. This market is fragmented using "deterministic" and "probabilistic" matching technologies. Deterministic means a piece of data that is [more or less] definitely correct for matching a user. For example, your email address, credit card, or other information. Tapad loves this stuff, so they have deals with a number of websites, apps, etc to collect as much of the deterministic-style data as possible. TripleLift does not directly participate in this market, but instead relies on partners like Tapad and Drawbrid.ge.

download (1).jpeg
color-drawbridge.png

Probabilistic data, on the other hand, is data that "probably" matches a user. If you get to a high enough confidence, for enough users, you'll likely get good enough results. This uses things like location data, behavioral patterns, IP data - things like whether devices regularly appear on the same WiFi etc, Tapad also uses probabilistic data to expand their deterministic models. TripleLift also does not play in this market.

Facebook and Google are the undisputed champs. They have your login information almost everywhere, and this is what powers the Facebook Audience Network and is a big piece of the Google Display Network. Amazon is likely getting there, and companies like Pandora, Spotify and others have a good amount of relevant data. 

The most surprising part of cross-device is that the browser in your phone is considered a separate device from apps. This is because they don't share any data, IDs, or other information that could tie them together. So a big challenge is actually unifying the same exact device.

Given the complexity of this space, as well as the murky PII and opt-out questions, TripleLift won't be building an in-house solution. We do expect to partner with the players that focus on this data.