Easily the strangest adtech deal of the year is the Gravity4 acquisition of Triggit, the web advertising buyer that did a lot of business inside Facebook’s FBX ad exchange.
People will not rejoice at this news.
Triggit took $US18.5 million in funding from investors. Because it was a tech startup with an actual revenue model, many people expected it to go on to great things. A larger company could have acquired it (making its founders rich). Or, perhaps, it could have eventually have become big enough to do an IPO like so many other adtech companies have done.
Chahal is the troubled founder of another adtech company, RadiumOne, who was ousted from that firm by his own board after he was accused of punching his girlfriend. The prosecution dropped felony charges but he pleaded guilty to two misdemeanours — domestic assault and domestic violence — following a plea bargain. He was sentenced to three years probation, a 52-week domestic violence training course, and 25 hours of community service.
Since then, someone has been mysteriously phoning members of media anonymouysly to spread dirt on RadiumOne. Two other RadiumOne board members have resigned, and a source tells Business Insider it’s because they’re bored of Chahal’s media drama.
This is not how anyone thought the Triggit story would end.
Triggit was founded by siblings Zach Coelius and Susan Coelius Keplinger, and Zach built a reputation as one of the great champions of real-time bidding in web advertising. Zach was often a loudmouth, who fought his battles with rival companies in public. But he is also a straight shooter. And he is one of the more interesting characters in the business. He will leave the company in the acquisition, along with his sister, and CTO Ryan Tecco, and it will be a shame to see him go. (He declined comment when reached by Business Insider.)
The company was founded in 2006, when most people had no clue that “retargeting” even existed, let alone how it worked. (Retargeting is the method in which advertisers place ads that can follow you around on the web based on your browsing behaviour.)
To give you an idea of just how uphill Zach Coelius’s battle was, here is a video from 2010 in which top ad execs from Mercedes-Benz, Lexus, Honda, and Volkswagen expressing absolute bafflement at a conference where they were asked about “agency trading desks” and “demand-side platforms”.
Trading desks and DSPs are the companies that place online ads, on which these execs were already spending hundreds of thousands of dollars. Today, no marketing exec would be this clueless and that is in large part to Coelius’s efforts.
Zach Coelius also made a bit of a reputation as a firebrand when he appeared on stage at the Online Marketing Media and Advertising conference in 2011 and accused the large ad agencies of a conflict of interest in the way they handle their clients’ money. Ad agencies take two fees, for both advising clients and spending their money, Coelius argued, and this seems questionable. You can see VivaKi AOD’s Mac Delaney restraining himself from punching Coelius in the mouth at 30.30 in this video of the session. Delaney ends up calling Coelius a “pre-schooler”:
As far as can be observed from the outside, Triggit’s fate appears to have been sealed mostly by Facebook’s downgrading of FBX, its big ad exchange market. Triggit was a big player in FBX, and in late 2012 took a $US7.4 million round of funding from investors who were happy with the fact that Triggit was handling Facebook ads for 200 different clients.
The problem was that inside Facebook a debate was brewing about the future of FBX. Some staff thought it was a hugely useful addition to the adtech market, because it utilised standard technology that was used elsewhere on the web, and let advertisers target people inside Facebook based on data those clients collected on customers’ web browsing behaviour. Others — like VP ads / product marketing / Atlas, Brian Boland — thought Facebook should develop a “closed” system in which advertisers had to pay for the use of Facebook’s targeting data rather than using their own data in an exchange.
Boland won that debate and in mid-2013 Facebook COO Sheryl Sandberg hinted to Wall Street analysts that FBX was “a very small part of our business and I think sometimes people don’t understand that.” It turned out that she was telegraphing the fact that Facebook would ultimately downgrade FBX. It would not be a priority for the company going forward. Some of the companies inside FBX have since been decertified by Facebook, meaning that they cannot advertise to clients that they are capable of buying ad space inside FBX.
It’s not clear how big Triggit’s revenues were at the time of the acquisition. The company had slightly less than 50 employees at its peak, we believe.
Regardless, a small but interesting chapter in the history of adtech is closing. Business Insider has heard that the company was sold to Chahal for less than what investors sunk into the company. And without Zach Coelius at the helm, Triggit will be a new and different beast anyway. It is sad to see it reach such a downbeat ending.
It would be great if Chahal’s new company could provide Triggit with a home where it can flourish beyond the niche it found. Fingers crossed.