Category: advertising technology

Google ups premium video play with mDialog buy

Scott Denne

Contact: Scott Denne

ABC, CBS and their peers can’t be expected to dump their primetime lineups onto YouTube alongside cat videos and ukulele covers of ‘Stairway to Heaven.’ That’s why Google’s premium video efforts are built around DoubleClick, including the just-announced acquisition of mDialog, a maker of ad-insertion technology for long-form and live-streaming video, which will support DoubleClick’s efforts to build an ad exchange for premium video.

Through owning YouTube, Google led the first phase of online video: short clips, occasionally pirated and often user-generated. Owning the second phase, as traditional television (not to mention traditional television advertising dollars) goes digital, will take a new technology stack as well as relationships with a new set of advertisers and content creators.

Google is not the only company to recognize the need for new teams and technologies to accompany this latest phase. For example, Comcast picked up FreeWheel Media in March to provide traditional media companies with services and software to monetize and manage their digital video. And last month, Kaltura, a maker of video editing, streaming and management software, bought over-the-top video specialist Tvinci in a deal that was as much about the target’s relationships with broadcasters as it was about its technology.

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Amobee moves past mobile

Scott Denne

Contact: Scott Denne

Amobee’s pair of acquisitions today shows a dramatic increase in the mobile ad network’s ambitions since becoming a subsidiary of SingTel in late 2012. The purchases of Adconion and Kontera for a combined $359m take Amobee beyond offering mobile advertising products and into selling advertisers the capability to reach their intended audience across digital mediums.

The pickup of Adconion brings Amobee the ability to send targeted ads to individuals across different ad channels (mobile, video, display, social, etc.) It also didn’t hurt that most of the target’s $185m in 2013 revenue came from North America, giving Amobee an instantly larger footprint in that market (about 40% of Amobee’s revenue comes from Asia). With Kontera, Amobee obtains technology that improves contextual understanding of where and how ads are placed on the Web and mobile devices.

These deals stand in contrast to Amobee’s only two previous acquisitions, which were mobile-focused technology tuck-ins (Gradient X and Adjitsu.com). The increasing importance of audience-specific, rather than channel-specific, digital media is a trend that’s playing out across the ad-tech industry as advertisers seek to optimize interactions with target audiences, rather than experiment with individual ad channels.

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Twitter stays mobile with Namo

Scott Denne

Contact:  Scott Denne

Twitter continues to focus on mobile advertising with the purchase of Namo Media, a native advertising specialist that brings better-quality ad formats to the social network and its mobile ad exchange, MoPub.

Maintaining a strict focus on mobile is Twitter’s best strategy today. Doing so keeps it mostly out of the crosshairs of Google’s ad business. It also plays to Twitter’s strengths – as most Tweeters log on with mobile devices, the social network can send those same users ads when they’re on other apps.

Marketers currently consider mobile a distinct advertising channel (with a distinct budget), and that’s good for Twitter. But they are increasingly thinking about the audience as a whole and the most effective way to reach it, regardless of where users are. That’s the logic behind several recent ad-tech transactions, including Oracle’s acquisition of BlueKai, Acxiom’s $310m LiveRamp buy, and Google and AOL’s respective purchases of advertising attribution vendors Adometry and Convertro.

If Twitter wants to benefit from that unified worldview, it can’t stick to mobile forever and will eventually need to make a strategic acquisition – such as the pickup of a broader ad exchange or major demand-side platform – to help advertisers reach its captive audience beyond mobile apps.

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Acxiom takes onramp to online data with $310m acquisition of LiveRamp

Scott Denne

Contact: Scott Denne

Acxiom makes its boldest bid yet to push its marketing data business further into the digital world with the $310m acquisition of LiveRamp. The marketing data giant has talked up the opportunities to expand its existing assets and build out its offline data assets for the digital sphere, but spending has been tame compared with this deal.

In 2013, Acxiom tripled its R&D budget to $31.6m, still only one-tenth of what it’s paying for LiveRamp. That tripling was, in part, to build and launch AOS, its data management platform for digital marketing applications. That offering gains potency with LiveRamp’s technology and partnerships and will position it to compete with Neustar and Oracle, both of which recently bought their own data management platforms.

Not only is Acxiom spending about 75% of its cash on the deal, it’s paying a healthy multiple. Discussing the acquisition on its earnings call, Acxiom said it expected LiveRamp to have $25-30m in annual revenue by the end of two years from now, meaning it values LiveRamp beyond 10x projected revenue. To add shock to the sticker price, take note that Acxiom hasn’t purchased a technology company since 2008 (when it snagged Quinetix for $2.7m) and hasn’t spent more than $100m on a technology acquisition in almost a decade, according to The 451 M&A KnowledgeBase.

LiveRamp built technology that takes in a company’s CRM data and matches it to online devices. Acxiom has long trafficked in consumer data, both its own and that of customers. By owning LiveRamp, Acxiom enables marketers to retarget existing customers online, even if it only has an offline relationship with them. For example, car companies could target customers with Web videos, even if they have only been to the dealership, and not the website.

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Google’s recent acquisitions go back to its roots

Scott Denne

Contact: Scott Denne

With Google’s announcement that it has picked up Adometry and its purchase in February of spider.io, the search giant has now made two acquisitions in support of its core business. The deals come after a nearly three-year hiatus from buying advertising companies. Its last announced advertising acquisition was the purchase of online exchange AdMeld in June 2011.

The recent transactions come as Google faces a slowdown in part of its ad business. Advertising revenue on Google’s own websites grew 20% in 2013 to $37.45bn, but sales from its ad networks and exchanges decelerated. That revenue was up only 5% to $13.13bn in 2013, compared with a 20% rise the year earlier, while already thin gross margins tightened during those years.

Adometry sells advertising attribution services that could boost Google’s network revenue by helping advertisers understand which ads help move prospects closer to a purchase, rather than giving all the credit to the last ad a customer clicks. It could also help Google attract more brand advertisers to its properties and networks, in addition to the direct-response advertisers that are drawn to Google’s pay-per-click model.

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