Making Job Search Easier by Finding the Great Companies First

Find a
Title/Key­words Com­pa­ny Name
Where Search
City, state or zip (option­al)
City, state or zip (option­al)
Job title, key­words Com­pa­ny Name Only


Can startup online video ad firms survive the big beasts in the Adland public jungle?

You don’t have to be a sea­soned busi­ness man­ag­er to know that soar­ing demand for online adver­tis­ing played along­side video clips is spurring big growth amongst star­tups spe­cial­iz­ing in online video adver­tis­ing. Com­pa­nies like, YuMe and Tremor Video Inc., for exam­ple, are all poised for Ini­tial Pub­lic Offer­ings lat­er this year, as the expan­sion in fast mobile encour­ages ever-more blog­gers and media firms to bump up the quan­ti­ty of video on their sites.

Colos­sal rivals

But the can­nier busi­ness devel­op­ment man­ag­er may well be enter­tain­ing some skep­ti­cal ques­tions about what kind of suc­cess can be expect­ed by these firms by sell­ing shares to the pub­lic. In real­i­ty, there aren’t that many inter­net adver­tis­ing agen­cies to have tak­en the IPO turn in recent years, large­ly because every­where they look they’re con­front­ed with the sight of a colos­sus: Google Inc. is firm­ly in con­trol of around half the dig­i­tal ad busi­ness.  That’s one heck of a big slice of pie.

Take Mil­len­ni­al Media Inc., which sells pro­mo­tions on smart­phones. After its IPO in March 2012, it’s now val­ued at half the total it float­ed at back then. While its stock cur­rent­ly trades at 1.8 times its rev­enue, Google’s price-to-trade ratio is 5.2 per cent. To the sea the riv­er flows (well, to Moun­tain View, anyway).

Star­tups like Tremor will sim­ply have to com­pete against Google, whose YouTube mod­el looks pret­ty unas­sail­able (con­tent own­ers are per­mit­ted by Google to run ads inside their uploaded YouTube clips and pro­mo­tions can be embed­ded in videos).  But there’s a cor­ner of the mar­ket that Google hasn’t yet cap­tured: the cor­ner that serves com­mer­cials on high qual­i­ty pro­grams. And that’s where small­er firms seem to be doing better.

Acqui­si­tion fodder?

But, as any busi­ness devel­op­ment man­ag­er can tes­ti­fy, noth­ing stands still for long in Adland. Google already has its eyes on the space, and accord­ing to for­mer Google prod­uct direc­tor Ari Paparo, it’s “very much on their radar and they’re look­ing to aggres­sive­ly go into the market.”

Final­ly, there’s the dan­ger of end­ing up as acqui­si­tion fod­der. Yahoo may have recent­ly failed to buy a stake in Dai­ly­mo­tion, but accord­ing to mar­ket ana­lyst Bri­an Weis­er at Piv­otal Research, it may look hun­gri­ly at when it hits the pub­lic arena.

There are some big, hun­gry beasts in that thar pub­lic jungle.

Print Friendly, PDF & Email