Did Videology just become another end-to-end stack? Amidst all the Advertising Week releases, events and industry noise, Videology announced that it was acquiring LucidMedia for an undisclosed amount.

For anyone outside of the US, Lucid Media was a successful ad network that pivoted into a DSP two years ago. The deal is likely to have an impact on the future business for the company, but the biggest implication is that Videology is no longer just a video buying solution.

Why Lucid Media?

Some in the industry might well be questioning the deal. It is no surprise that Videology would want to move beyond video - but why acquire Lucid Media? Lucid Media only added real time capabilities two years ago and they are not scaled globally - which as many know - is difficult when it comes to RTB. Scale is the silent killer in this industry.

Maybe the thought process had nothing to do with RTB at all? Videology needed a display based ad server with smart functionality that could also ingest their own ‘secret sauce’ of ad decisioning.

It needed a solution that could better service a growing demand from clients that was outside the traditional instream video piece. In this instance it has opted to buy instead of building or outsourcing.

The management team behind Videology built the first algorithmic ad network (Ad.com) so they know a thing or two about building infrastructure. But Scott Ferber, CEO, did mention in a interview with Adweek that the company did not want to "build all that infrastructure". This certainly circumvents the need to do that.

So Why Buy Now?

Videology is arguably the leading video solution right now. The ambitions to move beyond just video are clear motivations here. Building out display functionality would have taken a chunk of time and resource. Had Videology decided to build their own display serving capabilities, it could have been at least nine-to-twelve months before something was in the market.

What next?

Time will tell what the new strategic direction looks like and the impact it has on existing and new client partners. Videology to date has been positioned around addressing and decisioning against brand related objectives. Up to this point RTB and branding have failed to really co-exist. This acquisition could be less about having RTB functionality in the Videology offering, and more to do with servicing its client's display buying requirements.

ExchangeWire caught up with Ryan Jamboretz, Global Chief Development Officer, to provide more clarity on the acquisition.

Does this acquisition represent the start of a bigger play from Videology? Is it looking to build a stack of some sort?

RJ:  At its core Videology has always been focused on maintaining the superiority of our ad decisioning logic. That technology that was born of that philosophy has always been agnostic to the device or inventory type. As our clients have demanded that the technology work against a more diverse set of media types it was only natural for us to enable that functionality.

Given Lucid Media has only been operational with real time capabilities for 2 years, why did you choose to acquire it? 

RJ:  Over the last 18 months we've seen a rising trend in the US market for brand centric advertisers to reach their audiences across multiple platforms.  This led to us developing a close partnership with Lucid over the last year, in not only RTB media, but also upfront/guaranteed display media. Through the year we were impressed by the compatibility of Lucid's display technology with the Videology ad decisioning logic and decided to move from close partners to integrating them into our core technology stack.

Videology to date has been focused on delivering brand solutions. Does acquiring a DSP represent a departure from that? Or does Videology believe it can deliver, what most of the industry has struggled with to date, a true brand driven solution through RTB?  

RJ:  This action was driven by our client demands for Videology to ad decision against various media sources whether they are bidded or non-bidded. It's true our clients have high expectations with regard to content quality and to date the amount of high quality biddable content has been limited. Ultimately we strive to allocate our client's media spending to their desired audience irrespective of the type of inventory, device or pricing model.  As more high quality inventory comes to the market through biddable means, we expect the RTB portion of our allocations to increase.