Dive Brief:

• LinkedIn has entered an agreement to acquire the ad-tech firm Drawbridge, Tomer Cohen, the online networking site's VP of product, announced in a blog post. Financial terms of the deal were not disclosed.
• Drawbridge and its leadership team will be integrated into LinkedIn Marketing Solutions, the advertising platform that has experienced 46% revenue growth year-over-year, according to Cohen. LinkedIn Marketing Solutions has recently introduced new advertising products, including objective-based campaign management tools and a format called Pages, which revamps company profiles on the site to focus more on functions like community engagement.
• In the blog post, Cohen positioned LinkedIn's advertising services as centered around maintaining user privacy, data security and trust. "As we integrate Drawbridge's technology into LinkedIn following the closing of the transaction, we will continue to maintain the strong controls our members and customers have over the data they choose to share with us," the executive wrote.

Dive Insight:

The purchase of Drawbridge shows LinkedIn continuing to carve a digital advertising niche in the business-to-business space as far larger platforms weather harsh scrutiny from the public and regulators. LinkedIn, which is owned by Microsoft, appears to be positioning the deal as a means to build out its value proposition to advertisers and users around data privacy, an area that's hammered rivals like Facebook in recent years and added mounting pressure to introduce new laws to the digital sector. Microsoft isn't generally considered a large advertising player, but the company could be looking to change that image as it outperforms many of its younger disruptor peers and sees an opportunity to develop LinkedIn as an alternative site for marketers losing faith in the duopoly.

Drawbridge specializes in identity resolution, but has, like many ad-tech firms, been shaken by new data privacy regulations and growing consumer concerns around how their personal information is handled by businesses. The company wound down its media-buying operations in the EU last year in the lead-up to the introduction of the GDPR, according to AdExchanger. Unlike Google, Facebook and LinkedIn, smaller ad-tech firms like Drawbridge aren't generally recognized by consumers and operate largely behind the scenes, making it harder for them to earn trust and consent for data collection. That problem essentially disappears for Drawbridge under the LinkedIn banner.

The news adds to a string of ad-tech acquisitions that have cropped up in recent months as the space grapples with data privacy laws and a lack of fresh venture capital funding, an issue previously documented in Adweek. Traditional ad agencies have moved to snap up many once-hot ad-tech companies as data-driven marketing grows in demand and brands more frequently turn to consultancies for those services. Last year, IPG bought Acxiom Marketing Solutions, a data marketing unit that faced a bleak future under previous owner Acxiom after Facebook wound down many of its third-party targeting options in the wake of the Cambridge Analytica Scandal. In April, Publicis bought the data marketing firm Epsilon in a similar deal.

Much like LinkedIn, businesses not necessarily known for their digital advertising capabilities are turning to ad-tech acquisitions to better compete for brand dollars. Big-box retailer Walmart bought the cloud-based ad-serving platform Polymorph Labs in April as it ramps up a war with Amazon. Bloomberg recently reported that Amazon is far along in talks to acquire the ad server of Sizmek, which filed for Chapter 11 bankruptcy in March.

However, LinkedIn remains a smaller piece of Microsoft's pie, accounting for less than 5% of its total revenue, according to CNBC. Microsoft's search platform Bing is also slight compared to competitors like Google, commanding $1.91 billion, or 6.3%, of the company's total sales in Q3 results released in April, per CNBC.