Nielsen, the global market research company, said on Wednesday it was buying the Israeli startup eXelate and starting up research and development operations in Israel that it shut down in 2009.
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The United States company didn’t say how much it was paying for eXelate, whose technology helps digital advertisers better target their online advertising, but sources estimated it paid about $200 million.
“Adding eXelate’s solutions to the Nielsen family furthers our ability to help marketers improve the effectiveness of their advertising campaigns and to help media companies better sell their content,” said Steve Hasker, global president of Nielsen, which is best known for tracking television viewership.
The acquisition aims to give Nielsen access to so-called programmatic advertising – ads bought automatically on digital exchanges, relying on big data sets to determine consumers’ buying intent. In the U.S., programmatic ad spending grew 137% last year to $10 billion, or 45% of the U.S. digital display ad market, according to estimates by eMarketer.
Since it was formed in 2007, eXelate has raised about $32 million from investors, the last round in 2012 when it raised $12 million in a round led by the U.S. private equity fund New Spring Capital. Other investors include Israel’s Carmel Ventures, Menlo Ventures and Trident Capital, of which the U.S. Carmel is the single biggest shareholder, with a 25% stake.
The company was started by two serial entrepreneurs, Meir Zohar, who works as a senior executive and Elad Efraim, who is head of technology. An American, Mark Zagorski, is the CEO. eXelate, which had been working with Nielsen before the acquisition, employs about 100 people in offices in Tel Aviv, the U.S., Britain and France. Its sales are believed to be in the tens of millions of dollars annually. The 30 Israeli employees will join Nielson as the core of its new Israeli R&D center.
eXelate aggregates online data from third parties like Nielsen, social networks and online marketers, from which it has created a database of some 400 million web users. It uses the data to make real-time estimates about the demographic and other characteristics of a web user entering a site, and tailor the kind of ads that appear on it accordingly.