The Trade Desk (TTD) announced a definitive agreement to acquire Sincera, a digital advertising data company specializing in providing actionable insights, on January 15, 2024. The deal is expected to close in the first quarter of 2025. This acquisition is good news for TTD and advertisers, but bad news for companies like Integral Ad Science (IAS) and DoubleVerify (DV).
The Trade Desk: Enhanced Data Quality, Better Performance
Sincera specializes in evaluating the quality of data provided by publishers. By integrating the company’s technology, TTD can offer advertisers more transparent and accurate assessments of ad impressions, which is crucial for improving campaign performance. This enhancement allows for more effective programmatic advertising, providing advertisers with clearer insights into the value of the impressions they are buying.
The acquisition will optimize TTD’s platform, enabling better campaign management tools, thereby enhancing ad fill rates for publishers and making TTD a more attractive partner. Additionally, this expansion positions TTD to capitalize on emerging digital channels like streaming TV, digital audio, and retail media, where objective data insights are essential for improving advertising effectiveness.
Advertisers will benefit from enhanced, clearer, and more reliable data signals. With Sincera’s insights, they can make more informed decisions about their ad spending by optimizing campaign effectiveness with better targeting and more accurate bidding strategies, leading to improved return on ad spend (ROAS).
Bad News For DoubleVerify And Integral Ad Science
The acquisition strengthens TTD’s competitive position by bolstering its in-house data analytics capabilities. TTD’s ability to provide comprehensive solutions—combining campaign management, ad verification, and data insights—may attract advertisers who prefer an integrated service rather than patchworking services from multiple vendors. Sincera could give TTD an edge over competitors like DV and IAS, which focus on ad verification and measurement. Case in point, both companies offer services that measure the quality of inventory before buyers purchase it — reportedly, one of Sincera’s strengths.
This new threat for DV and IAS arises as some in the industry claim that these companies are struggling to provide their services due to signal loss—a claim both companies vigorously dispute. However, even as both DV and IAS maintain partnerships with TTD, the Sincera acquisition could push them to innovate or explore acquisitions of their own to maintain their market positions.
What Exactly Does TTD Acquire?
By all indications, Sincera is a tiny outfit, its size not commensurate with the reverence it has earned in the AdTech industry. Founded only in 2021, it received just $4.2 million in seed funding (and only in late 2023) and has barely over a dozen employees. While it’s hard to estimate revenue for a fledgling startup, even if Sincera was a rocket ship whose fuse has just been lit, I’d be surprised if 2024 revenue was greater than $5 million. Likely, revenue is significantly below that mark.
TTD is not acquiring Sincera for its revenue or distribution, but rather for its technology, data, and talent. Integrating Sincera’s technology with TTD’s existing systems should not present a major technical hurdle, given that Sincera has only been in serious operations for about a year and there cannot be all that much of it.
The acquisition also poses no financial risk to TTD. Though the companies did not disclose the financial details, even if the valuation multiple for Sincera was much higher than the currently common 3x multiple, the purchase price would still be financially insignificant for TTD. Let’s say the multiple was 12x like in the good old days of Web 1.0, and 2024 revenue was $2 or $2.5 million, then the purchase price might have been somewhere between $25 and $30 million. That would be equivalent to only about 2% of TTD’s cash reserves.
The market reacted positively to the news, with TTD’s stock price rising by 2.5% by the end of the trading day following the announcement.
Conclusion
TTD’s acquisition of Sincera is a strategic move to enhance its platform with more accurate and transparent data, improving campaign optimization and return on investment for advertisers. This acquisition strengthens TTD’s position in the competitive AdTech space, especially in relation to DV and IAS, as well as other demand-side platforms (DSPs). As the advertising landscape continues to evolve, TTD’s expanded data analytics capabilities may give it a competitive edge in how advertisers manage their campaigns across digital channels.
About The Trade Desk
The Trade Desk (TTD) is a leading global advertising technology company that provides a self-service, cloud-based platform for managing and optimizing digital advertising campaigns. It empowers advertisers to execute data-driven campaigns across various digital channels, including display, video, audio, connected TV (CTV), and social media. Through its platform, advertisers gain access to vast amounts of inventory, advanced analytics, and powerful tools to enhance targeting, measurement, and optimization.
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