Rubicon Project Exits Chango Business, Offloads Clients To IgnitionOne
This story has been updated from an earlier version to clarify that Rubicon didn’t offload the Chango business to IgnitionOne. It exited the intent marketing business which was just one part of Rubicon’s Chango acquisition.
While it was reported last week that Rubicon Project is exploring “strategic options” including a sale, now the company has exited its intent marketing business, which was part of its acquisition of Chango in April 2015. Clients will be referred to IgnitionOne, according to a filing with the U.S. Securities and Exchange Commission (SEC).
The intent marketing business, just one component of the acquisition, drove less than 5% of the ad spend on the Rubicon marketplace, according to Dallas Lawrence, a spokesman for Rubicon.
Lawrence explained that Chango is not shuttering. In fact, the business was integrated into Rubicon over the course of several months. Chango was folded into Rubicon’s buyer cloud offering. Then it was determined that it didn’t make sense to have separate buyer and seller cloud offerings. A new CRO was hired, who combined the buyer and seller clouds into one organization that sells across all customer segments.
Chango’s intent marketing business, a legacy unit, has 14 people who were offered jobs at IgnitionOne. The Toronto office is where most of the intent marketing personnel were based and it will close. About 30 people will lose their jobs in the Toronto office — the 14 are not part of that nearly 30, Lawrence explained.
IgnitionOne will acquire Chango’s clients and some employees in exchange for a fee from Rubicon Project.
In the filing, Rubicon Project said its intent marketing business generated $41 million in GAAP revenue and $19 million in non-GAAP net revenue in 2016. During Rubicon’s last earnings call, CEO Frank Addante hinted that the Chango acquisition “didn’t work out exactly as we thought.”
“These actions will enable the company to increase focus on growth areas, such as mobile, video, orders, header bidding and the recently announced consumer initiative,” Rubicon Project stated in an 8-K filing with the SEC.
Commenting on the changes, Hector Pantazopoulos, chief revenue officer, SourceKnowledge, told Real-Time Daily via email: “Chango was a performance-driven search intent ad solution. The fit with Rubicon was never really there. They had a client base, but what they were buying was very specific to the Chango offering. Rubicon was trying to get that buy side of the equation added into their tech stack, but it just drove focus further away from the publisher tools that built the company.”