Snapchat has reportedly been in acquisition talks with AdRoll as part of efforts to grow its ad business and win back investors in the wake of plummeting stock.
According to a report by Business Insider, a “person familiar with the matter” revealed that the San Francisco-based programmatic and retargeting specialist had been in ongoing talks with Snapchat shortly before its March IPO and continued after.
Snapchat recently acquired in-store sale analytics company Placed for a reported price tag of at least $200 million, giving it the arms to measure foot-traffic driven from in-app campaigns.
BI reported the source as saying in regards to Snap’s motives for AdRoll, “They’re looking for some business, or a set of businesses, that can help them demonstrate the efficacy of their ads,” adding that while a number of meetings were held, an offer was never put on the table.
Instead, AdRoll is potentially weighing up a number of other potential acquisition deals with interested parties; the company currently claims to serve over 35,000 customers and has raised over $90 million from investors.
According to BI’s sources, AdRoll is now “borderline profitable” and on track to generate over $300 million in revenue this year.
“Crushing” competition
Snapchat’s scouring the market for new ad tech additions comes with increasing concern among investors over its ability to drive ad revenue, following first-quarter earning results that fell far below par.
The financials, according to Barclays’ Ross Sandler, “were not enough to disprove ‘the Facebook is crushing Snapchat thesis’”, with a number of other analysts agreeing that “fierce” competition from Facebook – and its release of similar products – is hurting Snapchat’s user growth.
A steadily dwindling pool of users means the social media and tech company is under a lot of pressure to prove it can monetise and scale its service effectively, which discussions with AdRoll among other ad techs are demonstrating.