AppLovin Buys Measurement Provider Adjust as Apple's Privacy Lockdown Looms

Mobile advertising and gaming outfit AppLovin is buying measurement provider Adjust in a deal that is reportedly close to $1 billion, and it's a move that comes as Apple's pending privacy updates will complicate the space. The purchase was confirmed on Wednesday in a statement and amounts to AppLovin's fifth acquisition in seven years with the latest deal landing just months after it paid $500 million for Machine Zone, the gaming studio behind Game of War. Financial terms of the deal were not publicly disclosed, but multiple sources indicated to Adweek the transaction was valued at close to $1 billion. An AppLovin spokesperson did not immediately respond to Adweek's request for clarification. In a statement, AppLovin CEO Adam Foroughi, said, "Together, we believe we will propel marketing tools innovation forward for mobile app developers globally.” Headquartered in Berlin, Adjust has 500 employees and raised $255.9 million since it was founded in 2012 with the company set to operate as a separate entity to AppLovin, including the maintenance of its brand. Christian Henschel, Adjust CEO, said the combination of the two companies will help "shape the future of the app economy.” The move comes just months after AppLovin hired Morgan Stanley in preparations for an initial public offering, expected later this year, with the move set to value the company at much higher than its earlier $2 billion valuation. However, the deal comes at a time of trepidation in the mobile app space as privacy requirements in Apple's upcoming iOS 14 upgrade will require app developers to gain iPhone users' consent before they can pass on their details such as their unique IDFA to advertising partners. Apple's pending move has caused much consternation in the mobile advertising space. Many fear the barrier to user data will wipe much value of the $45 billion iOS advertising business, and media owners in France have submitted a complaint to regulators there in an attempt to stall Apple's move. Many believe the update will also significantly hamstring both AppLovin's ad sales business—hence its diversification into mobile gaming—as well as Adjust's ability to provide measurement and attribution services to in-app advertisers. Additionally, certain sources believe the pairing of a media sales company and attribution provider will bring into question the independence of measurement conclusions provided by Adjust—a criticism the walled garden providers such as Facebook and Google often face in the web-based ads ecosystem. Charles Manning, CEO of rival mobile app measurement firm Kochava, told Adweek marketers need to be concerned about which parties have access to their data. "If I was an advertiser who used Adjust, knowing that all your first-party data will be in the hands of an ad network is concerning," he said. "Also, if you are an ad network, are you going to be comfortable sending all of your impressions and all of your clicks to an advertiser's [mobile measurement provider] MMP for the purpose of measurement, if that MMP is owned by your competitor?" The deal between AppLovin and Adjust is still subject to regulatory and shareholder approval.