ExchangeWire rounds up some of the biggest developments in the ad tech space in the last week, and in this week's edition: Rubicon Project buys Chango; Xaxis buys ActionX; Programmatic spend increases 72% year-on-year, and "industry-first" pricing model launched.

Rubicon buys Chango

This week Rubicon Project bought ad network Chango for over $100m (£82.2m), mostly in stock, making the purchase its largest in its history, with the publicly-listed company claiming it will bring additional access to over $35bn "intent marketing spend".

A press release documenting the purchase states the acquisition will enable Rubicon to widen its offering to premium brands and publishers, and "acceleratet buyer cloud initiatives"

The purchase of Canada-based Chango also reinforces Rubicon Project’s direct order automation technology, through the advancement of its orders (guaranteed orders and non-guaranteed orders) platform, and will increase direct integrations with premium brands and agencies.

Frank Adante, Rubicon Project, CEO, said: “Chango’s technology brings keyword, contextual targeting and retargeting to premium display, mobile and video advertising.

"Our combined capabilities will help to grow and innovate, while also fueling a rapid acceleration of Rubicon Project’s overall Buyer Cloud business, advancing our technology roadmap and team build out by more than one year.”

Commenting on the transaction, Ciaran O'Kane, ExchangeWire, CEO, said: "This was an interesting acquisition, not because Rubicon bought a buy-side company, but more a realisation of the difficulty in building a 100% SaaS-based ad tech model. Chango, effectively, is an ad network with most of its retargeting buys under management.

"Its margins are probably fairly sizeable, given its IO-based business. This is not to slight the Rubicon Project acquisition, but more a confirmation of the monetisation models that work in ad tech.

"I feel a lot of ad tech companies are currently living in denial: they aspire to be something they are not, and as such, they are not realising their full potential. Digital advertising and technology has always been a complicated relationship.

"There are very few true SaaS models in this industry. People will doubtless point to Google (DoubleClick) and Facebook (Atlas) but they are effectively massive media businesses, and as such, are inherently biased towards selling their own media — whether that’s through proprietary attribution or walled data access."

Read more here.

Xaxis goes cross-screen with ActionX purchase

Furthering the acquisition trail, WPP's Xaxis announced the purchase of in-mobile app advertising platform ActionX as it seeks to further its cross-screen advertising capabilities for an undisclosed sum.

The acquisition enables Xaxis to incorporate ActionX’s proprietary technology into its offering, providing clients with an enhanced suite of mobile performance capabilities, according to WPP's ad tech hub.

ActionX will continue operating under the leadership of its founders Evan Schwartz, Scott Marshall, plus their management team, but it remains unclear if the company's initial branding will remain, or be enveloped within the Xaxis identity.

Brian Lesser, Xaxis, CEO, global, said: "ActionX is one of the foremost players in mobile performance advertising, with industry-leading technology and a proven platform utilised by mobile-focused retailers and subscription brands."

ActionX was one of the first platforms to take advantage of mobile application 'deep linking' and incorporate interest data from mobile applications into real-time segmentation, dynamic creative and cross-screen campaigns.

Evan Schwartz, ActionX, CEO, said: “The combination of our mobile-first platform with the products, client reach and scale of Xaxis is extremely powerful. We are excited to continue to build our platform and grow our business as part of the Xaxis team.”

PulsePoint reveals programmatic ad spend increased 72% in 2014

Programmatic ad spend increased 72% last year, with overall ad spend increasing 141%, while mobile internet traffic growth doubled that of desktop, according to statistics revealed this week by

When looking at total ad spend growth by region, Asia outpaced North America and EU in both desktop and mobile demand with 329% overall growth, according to the firm.

Exponential launches 'industry-first' pricing model

Exponential this week announced that it is to launch an "industry-first" hybrid pricing model called CPME that lets advertisers combine the best of the current CPM (cost per thousand) and CPE (cost per engagement) pricing models in the UK.

CPME works by charging a CPM price for the number of views of the video ad and then automatically moves to a CPE model if people engage with the ad in some way (such as rolling over an ad to expand it, clicking to the advertiser website or playing a game).

For example, if 1,000 people view the ad and 100 go on to engage with the ad, the advertiser would be charged a CPM for the 900 views and a CPE for the 100 engagements. The CPME model has been brought in to enhance the effectiveness of the two pricing models, which both have their strengths, but are potentially stifling creativity and advances in targeting technology.

For instance, CPM pricing ignores the value of engagement, whilst CPE pricing isn’t focused on finding the right audience in the first place, according to Exponential.

Jason Trout, Exponential, managing director, UK, said: "Valuing it in this way encourages greater investment in the ad teaser experience itself so it is optimised for the right people. At the same time, it places a value on the engagement, ensuring that ad quality is not sacrificed for quantity.

“Highly engaging video teasers will skew towards fewer impressions, whilst those more appropriate for broad awareness will be optimised without forcing engagement rates. This allows agencies to scale and optimise campaigns between display, in-stream and mobile more easily.”