Speaking to Business Insider, Unruly's co-CEO and cofounder Sarah Wood explained how the deal is huge for two reasons: for News Corp, but also what it signals for the wider media and advertising landscape.
Unruly specializes in serving and analyzing video advertising and brand videos that appear outside of the confines of YouTube and Facebook. Its technology allows marketers to buy "native" video ad formats using automated (known as "programmatic") means, track the performance of their video content across social, and it has an analytics tool that predicts whether videos are likely to go viral.
As part of the deal, Unruly cofounders Sarah Wood, Scott Button, and Matt Cooke will work for News Corp, although the company will operate as a separate business unit and remain in its east London headquarters. The three cofounders will report directly into Rebekah Brooks, who recently returned for her second stint in the role of News UK chief executive.
Unruly will increase News Corp's revenue "from day one"
Unruly's role will be to help News Corp's properties across the globe - from The Sun newspaper in the UK, to Fox Sports, The Wall Street Journal, and HarperCollins Publishers - better monetize their websites through video ads.
Marketers are crying out for premium video ad inventory because it harnesses the sights, sound, and motion of TV ads, but with better measurement and targeting options - but there's simply not enough of it to fulfill demand.
News Corp is hoping the deal will help it increase that supply. Unruly's performance goals are simply to deliver the three-year plan it already had in place: to roll out new native video formats, to grow geographically, acquire tech, and work with premium video publishers. News Corp's properties benefit from the growth of all of those areas - even the fact that Unruly will continue to work with other publishers, because that help improves the ad tech company's analytics and targeting engines (although who knows how long those other publishers will stick around and let News Corp take advantage of their data.)
Wood told Business Insider: "This is a catalyst deal for News Corp to accelerate their digital transformation."
Indeed, even News Corp executive chairman Rupert Murdoch tweeted about the deal, the company's largest UK acquisition since the News of the World phone-hacking scandal.
Want to welcome the Unruly team to News team and clients with their cutting edge creativity. Great deal, Rebekah.
The seniority of News Corp staff involved in sealing the deal appears to attest to Wood's claim that this is a major deal for the company - not just a tech bolt-on.
Brooks spent months "traveling all corners of the globe" to find a suitable tech target.
Unruly hadn't actually been looking to sell, despite receiving interest from many suitors. The company had received $25 million in total venture funding and grew revenues by 23% year on year to $42 million in 2014.
Wood's first conversation with News Corp came with the company's chief data scientist Rachel Schutt, when they both appeared on stage together at a TechCrunch event in November. Wood said it was immediately clear they shared a "passion" for data insight and bridging the gap between content and ad tech.
Schutt then introduced Wood to Rahul Chopra, the CEO of Storyful, the social news agency which News Corp acquired for $25 million back in 2013. They too shared an interest in how data can be used to target people with content that is most likely to strike an emotional connection with them.
"The next thing I know, Rebekah [Brooks] turned up at our offices," Wood said, adding that this happened "a few months back," when Brooks was working in a consultancy role for the company. Other executives involved in the deal were News Corp CEO Robert Thomson and the company's global head of business development and corporate development David Brinker.
Unruly
Unruly co-CEO and cofounder Sarah Wood.
Brooks returned to Unruly's HQ on Wednesday to announce the News Corp acquisition to Unruly staff. She was joined by News Corp co-chairman Lachlan Murdoch (also executive chairman of 21st Century Fox) and News Corp chief technology officer Paul Cheesbrough.
Business Insider asked what it must be like going from working independently as a startup to working with such well-known senior industry figures - not least, what it must be like reporting into Brooks whose initial stint as chief executive of News UK (then known as News International) was marred by the News of the World phone-hacking scandal, which forced her to resign her position in 2011. She was cleared of all charges related to phone-hacking, but some people, including UK shadow culture secretary Chris Bryant, have criticized her return to the company.
Wood said: "I was incredibly impressed by the purpose and professionalism of the entire senior team at News Corp. It was a major factor in the deal. Rebekah is passionate, knows the space well, and is looking to help News Corp accelerate its digital transformation, recognizing that video will play an integral part. You have to remember, she is a team builder. As a journalist and editor of The Sun she extended its leadership position, and as CEO of News International she oversaw profit growth. We're looking forward to working together with this highly passionate team."
Thomson Reuters
Rebekah Brooks.
When pressed on whether a legacy media company could become a video leader to compete with the dominance of disruptive digital natives like YouTube, Facebook, BuzzFeed, and so on, Wood said: "News Corp has been focusing on the global and digital growth of its business, with notable acquisitions and investments in tech companies, from Storyful, the world's first social news agency, to realtor.com and Checkout 51, as well as being an investor in Rubicon. It is also a leader in the digital transformation of the newspaper and book publishing businesses."
Expect more legacy media companies to make big strategic tech buys in the coming months
Wood thinks the deal signals a wider trend in the media/ad tech M&A landscape: Legacy media companies making big strategic buys in ad tech. We've already seen Verizon and AOL, News Corp and Unruly, expect more to follow.
"The media sector is evolving, and that brings opportunities and threats. There's an imbalance of demand and supply: There are so many ad tech companies out there, all competing for limited marketing budgets. We are seeing a shakeout of the ad tech sector. There's lots more consolidation to come. M&A levels are already on the rise. Expect that trend to continue over the coming months," she said.
Indeed, in the second quarter of this year in the US alone there were 59 acquisitions in the digital media space, according to investment bank LUMA Partners, which was up 37% on the previous quarter and up 47.5% year on year.
