Ad verification company DoubleVerify to acquire AI firm Scibids in $125 million deal

• Ad verification company DoubleVerify plans to acquire adtech firm Scibids for around $125 million.
• It intends to use Scibids’ AI expertise to help advertisers better target and optimize ad campaigns.
• Scibids clients include major ad holding companies and advertisers like Diageo and Dell.

DoubleVerify, a publicly traded ad verification company, has agreed to buy Scibids, an AI-powered adtech firm, for $125 million in cash and stock.

DoubleVerify assists marketers in avoiding their ads appearing next to objectionable content and allows them to verify that those ads were viewable by real people. Scibids technology automates bidding in ad auctions and how much budget to devote to each campaign using data generated by a marketer’s advertising stack.

The two companies first collaborated in June of this year to launch the “DoubleVerify Algorithmic Optimizer.” The product combines DoubleVerify’s media quality and ad performance data with Scibids’ AI algorithms to help advertisers improve campaign performance.

According to DoubleVerify CEO Mark Zagorski, Scibids’ technology significantly increased user attention levels and the number of impressions DoubleVerify won in ad auctions across several campaigns with Fortune 500 brands.

“We think there’s something really special there, and we want it all to ourselves,” Zagorski explained to Insider.

Even before the hype surrounding generative-AI, which was driven by companies like OpenAI and Microsoft late last year, adtech companies have long touted the use of artificial intelligence and machine learning to target and customize ad campaigns. As platforms like Google and Apple phase out identifiers like third-party cookies and mobile IDs that allow advertisers to track people across the internet, these models have grown in popularity.

Scibids, which was founded in 2016 in Paris, France, has clients that include all of the major ad holding companies as well as major brands such as Diageo, Dell, Allianz, and Spotify.

Scibids was named one of the “most promising advertising and marketing tech startups of 2022, according to VCs” on Insider’s list. According to experts, they chose Scibids because marketers are increasingly turning to new technologies such as artificial intelligence (AI) to fine-tune their digital targeting as the industry shifts away from tracking individual users.

While DoubleVerify is best known for its verification and brand safety tools, it also provides solutions that can target ads based on the types of content consumed by a marketer’s audience. According to Zagorski, these so-called activation solutions now account for roughly half of DoubleVerify’s business.

The purchase price for Scibids will be approximately $66 million in cash, with the remainder paid in DoubleVerify common stock. If Scibids meets certain targets by the end of the year, there is an additional performance component.

Scibids had previously raised $7.2 million in venture funding and employs approximately 70 people, including more than 20 AI engineers and data scientists, who are all expected to transfer to DoubleVerify as part of the transaction.

The acquisition shakes up an otherwise sleepy year in adtech M&A. According to the investment bank LUMA Partners, there were only 28 adtech transactions in the first half of 2023, down from 32 in the first half of 2022. According to LUMA, only four of these transactions have exceeded $100 million this year. Former LUMA partners Brian Andersen, Dick Filippini, and Mark Greenbaum advised Scibids on the DoubleVerify transaction, which was their final transaction before departing the bank this year.