Oracle acquired Grapeshot, a ‘brand safety’ marketing provider, sources say for up to $400M

In the era of fake news and controversies over how brands’ advertising — via programmatic platforms — unwittingly ends up alongside content with which they’d rather not be associated, Oracle has made an acquisition to beef up its ability to help customers with these marketing challenges.

The company has announced that it will acquire Grapeshot, a startup out of Cambridge, England, that has developed a platform to help ensure “brand safety”, along with solutions to help brands, agencies, publishers and ad platforms to match ads to more specific placements overall.

The startup will become a part of the Oracle Data Cloud, Oracle said, working specifically in the area of Audiences and Measurement, which already provides a number of other tools to marketers, such as data for custom segmented audiences.

The terms of the deal have not been disclosed but one of the investors tells us it was in the multiple hundreds of millions of pounds. Conservatively assuming at least £200 million, this means Grapeshot has sold for at least $280 million; but the source said it would be safe to assume a higher multiple, so I’m now thinking it was for between $300 million and $400 million. However, another source said it was for around $150 million. Assuming both are “right” the higher number might be including an earn-out. Still trying to find out more.

In either case, it is a strong exit for the company that speaks both to how timely this issue is right now, and also the strength of Grapeshot’s technology and existing business. For some context, Pitchbook notes that Grapeshot’s last pre-money valuation was around $56 million (£40.2 million) in May of 2017, while Crunchbase notes that the company has raised only $22.4 million from investors that include IQ Capital Partners, Draper Esprit and Albion. It’s “an outstanding return”, said the investor.

Grapeshot, via its Contextual Intelligence Platform, says it works with some 5,000 marketers globally, covering some 38 billion programmatic ad impressions. It’s been growing at a rate of over 100 percent year-over-year, it says. It looks like it will continue to work with existing customers, who will in turn become potential targets for the cross-selling of other Oracle services.

The rise of Grapeshot and its acquisition by Oracle speaks to a growing challenge in the area of adtech and corresponding marketing technology: while programmatic advertising has largely become the norm across the web, there are some unintended consequences from all that automation.

For one, it’s harder to specifically match ads to content in every case — and this might potentially become even more difficult with the rise of stronger data protection and increased scrutiny on how are data is used for ad targeting. One of Grapeshot’s services helps marketers solve this with technology that helps match ads not just to basic sites, but to keywords on pages.

But in the worst-case scenarios, brands are finding their ads running alongside content that is outright damaging to their images. In a recent scandal, advertisers were forced to freeze some ads on YouTube when they were found to be running alongside videos of kids with obscene comments from viewers.

Ideally both for the brands and YouTube, the ads would have never been there to begin with — and that is the kind of outcome that Grapeshot (and now Oracle) is going to be helping achieve.

There are, of course, a lot more controls in place now to try to prevent situations like this, and products aimed at generally making it easier to match ads to content. Search giant (and YouTube owner) Google, the world’s biggest online advertising company, earlier this year launched a new AdSense product that uses machine learning to “read” content on specific pages to understand the context before it serves an ad to it.

The interesting thing about Grapeshot is that it’s working a layer back before this. By not being tied to any specific ad platform, Oracle has the potential to play a strong hand as an unbiased helper to customers to achieve the best results.

Oracle has made a number of acquisitions to expand its digital marketing and advertising solutions business, to tap into the rise of social media and also to compete better against Salesforce. They have included Compendium, Moat, Involver, Vitrue, Netsuite, Market2Lead and many more.

Additional reporting Josh Constine