Gregory R. Raifman, president, The Rubicon Project
The Rubicon Project’s surprise announcement last week that it’s seeking to acquire Toronto tech company Chango went largely unremarked outside of Canada. To the international ad press, it was just another whale-swallows-minnow story.
But as the (arguably) second-most successful programmatic player in Canada (after Index Exchange), Chango’s buyout will go down as a turning point for the country’s young but fast-growing ad tech market.
For anyone involved in programmatic in Canada, the fear is that this could be another acqui-hire, drawing valuable Canadian talent down to Silicon Valley. With the consolidation of the global ad tech industry well underway, Canada’s small, tightly-knit group of independent companies look to be ripe targets for mature Silicon Valley heavyweights with four-letter ticker symbols and shareholders to impress.
But Rubicon president Gregory Raifman says that’s not in the cards for Chango.
There are no plans to relocate Chango’s office or any of its employees to the U.S., he said. Chango founder and CEO Chris Sukornyk will stay on as head of a new division within Rubicon that will be based in Toronto.
Raifman said Chango’s success has convinced Rubicon that the city is an emerging hub of tech talent.
“Toronto is going to be a big focus for us going forward. We know how much rich engineering and technology talent there is in Toronto,” he said.
“We have no plans whatsoever to shut down, close, or do anything with respect to the Toronto office. Far from it — in fact we’re looking forward to building that office bigger, hiring more talent there, and taking advantage of our global status.”
Rubicon first gained a foothold in Canada with its purchase of guaranteed direct platform Shiny Ads last year. The former Shiny Ads team will be merged into Chango’s operations to form a single Toronto office that will handle regional sales and contribute to global product development efforts.
Raifman stressed that despite being founded and based in Los Angeles, Rubicon has become a global company, with offices in nine countries including the U.K., Germany, Japan, Australia and Singapore. At the moment, 40% of its revenue comes from non-U.S. markets, and it was recently chosen to provide the programmatic exchange technology behind Pangaea, a conglomerate of European publishers led by CNN International, The Guardian, Reuters and the Financial Times.
The young, fast-growing Chango first caught Rubicon’s eye thanks to its unique approach to direct response ad buying. Chango has pioneered and polished a method of what’s called “intent marketing” — contextually retargeting people who are considering or intending to buy a product, and driving them to convert.
But it’s also taken its search data analysis a step further, to identify users that have an affinity for certain brands based on their search history. In a interview with Marketing last month, Chango VP marketing Ben Plomion explained that a consumer with an affinity for Coke or Pepsi could be identified by seeing that a user has searched for educational materials about them or about the category. That kind of information can make for effective, precisely targeted brand messaging.
Rubicon has been paying close attention to the growth of intent marketing, and that brand clients have shown a lot of interest in the technology. The company estimates the market is now worth about $35 billion globally.
Rubicon plans to apply Chango’s intent marketing technology to its Buyer Cloud platform for brand and agency media buyers. Although Rubicon’s most widely known for its publisher-side platform (it started back in 2007 as a tool for publishers to manage ad inventory and increase yield), its developed a robust suite of services for both programmatic and direct buyers.
Raifman said that the Chango acquisition would accelerate Rubicon’s plans to add intent marketing to Buyer Cloud by over a year. Up until now, Buyer Cloud has been focused on technology for CPM-based brand advertising. But with Chango’s acquisition-geared cost-per-click and cost-per-action pricing options, Rubicon hopes to round out its offering. Rather than doing only brand advertising or direct response in programmatic, these days most big-name marketers are looking to do a mix of both, and Rubicon wants to be able to offer both on the same platform.
Like competitors AppNexus and PubMatic, Rubicon has also been investing heavily programmatic direct, where most premium brand dollars seem to be heading. In February, it rolled out Orders, a service within its Buyer Cloud platform that caters to brands looking to buy targeted ads directly from premium publishers, with the option for audience guarantees.
Integrating Chango’s intent marketing capabilities into the Orders platform will be a priority, Raifman said.
“You have seen automation in the open auction environment, called RTB, but you are gradually seeing automation in the more premium, upscale markets that have traditionally been managed by direct selling teams,” he said. “We see Chango as a capability that will help us in that part of the market, given their data and retargeting capabilities. Bringing that to bear in our Orders product is a very exciting opportunity.”
As for whether Chango will keep its own brand, and the creative marketing efforts it’s put into building it — which over the past few years have become the envy of ad tech companies throughout Canada and the U.S. — Raifman said Chango will eventually be folded into the Buyer Cloud, and its marketing team will merge with Rubicon’s. There’s no clear timeline yet on when that will be.
