WPP plc’s WPPGY data and programmatic arm Xaxis has acquired mobile ad-tech company Action Exchange, Inc. (ActionX), in a bid to further expand its share of the online digital market. The deal will enhance Xaxis’ prowess in targeting ads within apps and connecting user identities across devices with better accuracy.
Financial details of the transaction were kept under wraps.
The Acquiree
Based in New York, ActionX provides mobile first data, audience targeting and creative advertising technology to e-commerce and media subscription companies. The mobile performance-based marketing company’s impressive client list includes Hearst, Forbes and JackThreads.
ActionX works primarily on behalf of the app owners, tracking the anonymous behaviour of mobile app users and then serving ads to those users based on their activities. Its clients, like the commerce website Jackthreads, often have users logged in, and ActionX helps match them across devices.
Interestingly, ActionX is backed by U.S. mobile giant Verizon Communications Inc. VZ, though there is no ad technology partnership between the two companies at present.
Exploring e-commerce
Xaxis, which WPP touts as the world’s biggest programmatic media platform that directs over $770 million of audience-targeted media buys across 40 markets, aims to fortify its mobile capabilities and leverage proprietary media products to develop new ways for brands to programmatically engage with consumers.
The ActionX acquisition will help Xaxis expand its e-commerce footprint as it incorporates the former’s proprietary cross-screen advertising technology, helping brands to reach consumers with customized messages. The ActionX solution will be rolled out to Xaxis’ clients globally in the coming months.
The Ad Giant’s Strategy
According to research by eMarketer, global ad spending on mobile is expected to grow to nearly $65 billion by the end of this year, and to over $158 billion by 2018. The world’s biggest advertising group, WPP has been quite vocal about its ambitions to expand into e-commerce, and leverage the huge market potential that these statistics indicate.
WPP had formerly set a target to derive 40-45% of its overall group revenue from its digital business within the next five years. In 2014, WPP’s digital business accounted for 36% of its total revenues. Such acquisitions will boost its digital segment, allowing it to stay ahead of its peers as the mobile ad market moves from driving user acquisition and app installs to smarter, more behaviour-based targets.
This investment is in sync with WPP's strategy of investing in fast-growing sectors such as mobile and e-commerce. The ad giant’s other recent investments in digital businesses include AppNexus, comScore and Rentrak.
WPP presently carries a Zacks Rank #3 (Hold). Other notable advertising firms that compete with WPP include Omnicom Group Inc. OMC and The Interpublic Group of Companies, Inc. IPG.
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