A new front is opening up in the battle for advertising dollars. Last week, Mediaocean and Adobe announced a partnership in which Adobe is licensing Mediaocean's Spectra platform that will enable advertisers to purchase TV ads digitally.
For decades, the TV industry has used the same ad buying model which is surprisingly manual. Mediaocean's Spectra platform allows TV ad buyers to purchase ads through its digital platform. A move to digital ad buying will increase the dynamism of TV ad buys, creating space for innovation in the way ads are delivered to consumers.
For example, imagine your phone listening to what you're watching on TV and you getting ads that correspond on your phone. This Mediaocean/Adobe partnership would help make this sort of automation possible, creating all sorts of avenues for monetizing consumers.
This is also where the next battle front is. Google is trying to get TV ad buyers to use it's auction platform to buy ads and Facebook has been working on getting ad buyers to purchase ads through their platform for their app-based viewership. Whoever builds a moat around unifying the tv ($178B) and digital ($209B) ad buying market will do quite nicely.
What's a Mediaocean?
Mediaocean is a leader in the advertising software and services space, enabling over $100B in ad spend, and was early in working toward automating the process of buying TV ads. Robert Smith's Vista Equity Partners bought a majority stake in the company two years ago valuing the company at $720M.
This valuation was well below the $1.5B the company was valued at a few years prior when Mediabank and Donovan Data Systems merged to form the company. Vista Equity Partners is apparently working with the company to further develop products like Spectra and help the company expand internationally.
The plan seems to be working as per Axios, this deal with Adobe makes Adobe the first independent marketing stack company that is managing its full television buying process with Mediaocean technology. Whether Mediaocean can build a moat around this space before Facebook and Google figure things out will take some time to see.
What Can You Do For Me Today?
If Mediaocean is able to unite digital and TV ad buying and beat out Google and Facebook for market share, media companies could find new revenue streams and a reprieve from what has been a difficult few years for the industry.
Over the course of 2017, the media industry saw multiple companies declare that they were making a shift to video in attempts to find a new way to sell ads and find greener pastures for revenue streams. That didn't work out well for these media companies.
BuzzFeed missed it's revenue numbers. Mashable sold itself for a paltry amount. Vice missed it's numbers. The list goes on. The media industry has been talking about the impact of Facebook and Google gobbling up sizable portions of the media industry. Last year really brought that home and I'm sure
Vista Equity Partners acquired another company last year, Marketo, which is a market leader in marketing automation. Companies use its platform for things like re-targeting display ads. So, if the listening phone mentioned above really happens, media companies could really get creative about finding revenue streams.
This is particularly true for companies like Discovery Communications which has an option to take a majority stake in Group Nine Media, which includes Thrillist, NowThis, and other media properties among its portfolio. The ability to sync up and personalize advertising across Discovery's TV channels and digital properties would be fantastic for business.
You Heard What?
The concept of our phones listening to what we're watching on TV isn't farfetched. Ohio-based startup Lisnr has built technology that enables this. In fact, Comcast ad company Freewheel had a team of employees participate in a hackathon a few years ago where they used Lisnr's technology to track ads on any device within earshot of a phone. Lisnr founder and CEO Rodney Williams is going to change the advertising game.
Getting Money Each and Every Way
No companies have really figured out how to give Facebook or Google a run for their money in the digital advertising space. The shift to video didn't work last year. This year, the talk of the town has been consolidation among media companies in order to compete with Google and Facebook at scale. Perhaps, Vista Equity Partners is figuring out a couple back doors to upend the two behemoths through Mediaocean and Marketo. Let's watch and see!