The two publicly-traded companies, the former based in New York and the latter in Los Angeles, plan an all-stock transaction to close in the first half of 2020 that will leave Rubicon shareholders owning 52.9% of the merged firm.
“The combination of Rubicon Project and Telaria will establish the world’s largest, independent sell-side advertising platform with scale, capabilities and solutions unmatched by the competition,” Rubicon president and CEO Michael Barrett, set to become chief executive of the merged firm, said in Rubicon’s announcement.
“Together, we will create a single platform for transacting CTV [connected TV], desktop display, video, audio, and mobile inventory in a transparent and unconflicted manner,” Telaria CEO Mark Zagorski said in a post on that firm’s site.
Telaria, founded in 2005, includes Hulu and Sling TV among its clients and has recently inked deals to provide advertising services to the Philo streaming service and the media firm Tastemade. Rubicon, founded in 2007, calls itself “one of the world’s largest advertising exchanges” and has grown through a series of acquisitions, most recently of the adtech tools provider RTK.io.
The duo compete in a complicated market that remains in need of standards for addressable advertising, but one analyst voiced cautious optimism about their prospects.
“We need to see where things shake out, but these are two strong companies with different complementary skill sets, and if they can use Telaria’s TV skills with Rubicon’s programmatic skills, they can be a strong independent option,” said TV[R]EV co-founder and lead analyst Alan Wolk in an e-mail. That analyst firm just published a report on addressable-TV advertising.
Privacy concerns—both enforced in such developing legislation as the California Consumer Privacy Act and evoked by Apple as a selling point for its Apple TV+ streaming service—may further complicate matters.
Wolk suggested Telaria and Rubicon’s relative experience would help them deal with those issues. “It will cause them to be more cautious about data sources and more proactive about getting consent from users, but it’s still a very nascent market,” he said. “The MVPD addressable market is already governed by legislation on how you can use viewer data, and they’ve been able to make a business out of it.”