European entertainment company RTL Group (EBR: RTL) is set to purchase a 65 percent stake in Denver-based digital video advertising company SpotXchange Inc.
The deal, valued at $144 million, comes as more big-name buyers look to scoop up advertising companies that specialize in digital video content on mobile devices. Recently, Single Touch Systems Inc. (OTC BB: SINO) acquired ad targeting service Double Vision Networks for $4 million.
In early July, Facebook Inc. (Nasdaq: FB) purchased LiveRail, a startup that helps businesses buy more relevant video advertisements, its first move into serving video promotions on the Web beyond its own social network. Yahoo (Nasdaq: YHOO) advanced into the space in 2013 when it bought and shuttered Bread, a San Francisco service that helped social media publishers monetize content by advertising across desktops and mobile devices.
RTL, which follows a traditional broadcasting business model and owns more than 50 television stations, looks to boost its advertising services as well.
The Kirchberg, Luxembourg-based company, which is owned by German media conglomerate Bertelsmann SE & Co., is hoping the SpotXchange deal will expand its online media offerings to take advantage of the increasing demand for videos, games and other multimedia content on mobile devices.
The acquisition of SpotXchange allows RTL to tap into the target's data, which includes information on the media behavior of younger audiences. Programmatic video advertising, an automated method used on campaigns for brands that uses algorithms, is expected to increase to $15.4 billion in 2018 from $2.7 billion in 2013, according to RTL. The acquisition is slated to close in August.