DataXu Buys Mexad In European Land Grab; And Why #1 Rating In Forrester Means Very Little To Anyone In Europe

ExchangeWire respects press embargoes. If we are asked to keep “scthum” on a story, we’ll respect the wishes of the companies and individuals involved. On this side of the pond, there is a little bit of class left in the ad tech space. As I predicted a matter of days ago, there would be a raft of M&A activity in the European ad tech space in 2012 (I didn’t expect it to be so soon). Seeing as there is no point in breaking the story now, let’s look at why Dataxu bought Mexad, the implications of the acquisition and why winning a Forrester tech “beauty contest” will curry little favour in the European market.
DataXu Buys European Market Share
Dataxu was late to the European DSP/RTB party. Invite, AppNexus, MediaMath and Turn have a sizeable lead on DataXu in the European market. Although there are no hard stats, I can only go on what I know and who I talk to in the space. Buying Mexad will immediately give DataXu a beach head into Europe. Mexad are very strong in Germany – the biggest display market in Europe. They have a decent footprint in the UK, and have been growing aggressively in Southern Europe, CEE and France.
DataXu Buys Talent & Local Expertise
If there was one thing Mexad excelled at it was local expertise. They knew their markets – and tailored their business accordingly. The idea that an algo can optimise 100% for local markets like Poland and Spain is total rubbish. These markets will require some kind of manual optimisation – and Mexad have been particularly adept at this particular function in the European countries it operates in. With this acquisition DataXu is getting some smart people who understand the European marketplace.
What Are You? Service Versus Tech…
This could be an issue going forward. Mexad is essentially a service business. It sits on media plans – and takes budget much in the same way ad nets currently do. How will this sit with DataXu’s pure play tech approach? Will Mexad continue to run its service business – or will it be folded into the DataXu operation? I’ve seen some arguments on this acquisition being some kind of “next generation agency” pivot. And all I can say is that this is not going to happen. Agencies are too strong in Europe, and Mexad’s business is 100% focused on the agency media buyers. The muddled model is a bit of an issue – but it’s not insurmountable. Having a strong service layer is no bad thing in Europe, which remains ridiculously agency heavy.
An Ad Tech Exit In Europe Is Good For The Space Here
Although the exit was relatively small in comparison to the big ticket US M&A deals, this will be seen as a boon to the burgeoning ad tech space here. As I said before there is real value in this market as many of these European startups have raised little capital and have arguably better tech. The other interesting trend you’ll see is the “euro market grab” – where US companies buy into an undervalued European market. This will become more common as US players try to scale their businesses globally. Some will do it for tech; others, as in the case of DataXu, will buy market share and local talent
Seriously Nobody Cares About Your Forrester Rating In Europe

If you were to read the trade press (and I try to as little as possible these day), you’d think everyone was a winner in the recent ad tech beauty contest run by Forrester Research. As you’d expect, the analysis had a strong US bias – with client penetration there being a key focus of the report. It is for this reason that the results have gained little traction in Europe. Nobody cares here if you were #1, joint first or the “most improved manually optimised buy-side vendor” in the US market. How about a straight shoot-out just in Europe – with Euro vendors included? Then we can really separate the wheat from the chaff. I am only saying it as I see it. Note to the industry: this is a nice benchmark for the US; but of little value to us in Europe.
And Finally Congrats To Mexad
Kudos to Sacha Berlik and his team at Mexad. Everyone in the space will doubtless congratulate them on their sale to DataXu, and wish them the best going forward. Already looking forward to more European M&A action in the coming months.