The music streaming company Pandora is acquiring AdsWizz, a company that specializes in helping deliver audio ads to streaming music services. The cash and stock deal is valued at $145 million, according to BusinessInsider.
Founded a decade ago, AdsWizz is an early player in the verdant realm of "programmatic audio" advertising. The company's suite of software is not unlike what Google or AppNexus have built in the display advertising business.
AdsWizz's suite of software and tools can be used to buy audio ads, package them for sale, and make sure they are automatically delivered to the right person at the right time. The Belgium-based startup works with streaming companies ranging from Pandora rival Spotify, Cox Media Group, as well as the podcast network Podcast One.
The move to acquire AdsWizz essentially thrusts the streaming media company into another category - essentially it's become a facilitator for the audio ad industry as much as a it remains a company that sells ads and music subscriptions.
To date, Pandora has mostly built its ad business by putting sales reps on the ground in local markets, going after ad budgets that traditional have gone to terrestrial radio. But CEO Roger Lynch, who took the role just five months ago, sees acquiring AdsWizz as accelerating Pandora's - and the industry's - adoption of programmatic audio ads.
Originally AdsWizz was focused on web video ads, until it saw an opening and shifted to audio in 2011. CEO Alexis Vandewyer said his company was not necessarily seeking a buyer, but felt the timing was right when Pandora expressed interest.
Vandewyer said that in some markets in Europe, 80 to 100% of streaming radio ads are already sold via programmatic platforms, which gives him confidence that the same dynamic will play out in the US. "We've seen extremely aggressive growth in some markets," he said. "Our goal is to continue to serve the industry, and it's also a very clear set goal to remain independent."
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