Twitter Acquires MoPub to Expand Real-Time Bidding to Mobile

Twitter pulled the trigger on its biggest deal to date, acquiring MoPub on Monday to expand its reach and capabilities in native advertising and real-time bidding for mobile ads. By bringing MoPub and its mobile ad exchange into the fold, Twitter intends to gain an upper hand as it accelerates the shift toward programmatic buying. The move also positions Twitter as a more comprehensive platform for publishers and advertisers to engage in real-time conversations.

Twitter plans to “use MoPub’s technology to build real-time bidding into the Twitter ads platform so our advertisers can more easily automate and scale their buys,” Adam Bain, head of revenue at Twitter, notes in a blog post.

“We think there is a key opportunity to extend many types of native advertising across the mobile ecosystem through the MoPub exchange,” Bain adds. “Our approach is to show an ad when we think it will be useful or interesting to a user, and that isn’t changing.”

It’s too early to know exactly how Twitter plans to integrate and sell theses new capabilities to brands, agencies, and publishers. But there’s no question the move is as deliberate as it is compelling for an industry that has watched mountains of mobile revenue pile up in the hands of an increasingly small number of players, namely Google, Facebook, Pandora, and Twitter.

Mobile ad networks and demand-side platforms (DSPs) like MoPub are trying to carve out a marketing niche, says Traction CEO Adam Kleinberg, but as the industry realizes that standardized mobile inventory like banner ads in video games are “crap,” he says more companies like MoPub are going to be acquired at a bargain. Although Twitter and MoPub haven’t disclosed the financial terms of the purchase, TechCrunch reported that the all-stock deal could clear $350 million.

“Mobile companies have really sophisticated targeting capabilities, but the fulcrum point between that targeting and brand experiences is a crappy little banner ad interrupting my game of Paper Toss. They can’t sell them because people hate them and so their value goes down. They see the writing on the wall, so they hang a for sale sign on the door. A company like Twitter sees this as an opportunity to snatch up real estate for cheap,” Kleinberg tells ClickZ.

“It’s snap up time on the mobile technology market and they figure if they can layer in the automation of relevancy that a mobile DSP like MoPub offers, they can automate how their native ads are connected to more relevant customers,” he adds.

MoPub CEO Jim Payne describes the two companies as a “natural match” because both have been “mobile first since their inception.” When MoPub was founded three years ago, he and his co-founders had a firm belief that programmatic buying and a strong commitment to serve the publisher would enable the development of a new ads economy in mobile,“ he notes in a blog post.

"In addition to investing in new capabilities for our publisher platform, we believe there are opportunities to bring better native advertising to the mobile ecosystem. With the support of the team and resources of Twitter, we’ll be able to move even more quickly towards the realization of our original vision,” Payne writes.

At the time of the acquisition, which coincidentally fell on Bain’s third-year anniversary at Twitter, MoPub had almost 100 employees and says it serves billions of mobile ads every month. The deal marks Twitter’s eighth acquisition so far in 2013, and the second in as many weeks.

The late summer acquisitions of Trendrr and MoPub come as Twitter is widely expected to be preparing for an initial public offering. Indeed, Twitter’s acquisition activity has steadily climbed since 2010 when it acquired five companies, followed by six in 2011, and the seven deals it made last year.

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