Happy Friday 24.01.19
Start Ups, GDPR Woes & Connected TV Growth
There’s been so much happening this week! The first couple of stories this week are focussed on Start-Ups: Acorn Intelligence which has been set up by two (very) senior former Amazon employees and has the potential to be to Amazon what MightyHive were to Google & Beeswax who are growing at a clip & have just raised $15m in Series Bee (sorry) funding to expand further.
From Start-Ups in their ascendancy to Giants in trouble with law makers, this Tuesday Google was given the biggest GDPR fine to date: $57 Million by French lawmakers, we look at what this & what it could mean for AdTech. Finally we turn our attention to connected TV, it has been another busy week in this space of the market as media conglomerate Viacom bought ad funding streaming service Pluto TV for $340m & Telaria announced it had struck a two year deal with Hulu to power its PMPs.
2019: The Rise Of Amazon Specialists?
Amazon saw remarkable growth in 2018 as it rolled out feature after feature & became the number 3 ad platform in the US.
They’ve shown no sign in slowing down in 2019, only two weeks ago they launched viewable conversion reporting in their platform & this week they announced they were adding in a “new to brand” metrics allowing advertisers to understand incrementality better, specifically whether an ad-attributed purchase was made by an new customer or a repeat purchaser.
Because of the remarkable pace at which the platform is developing, we are starting to see Amazon specialists pop up. Many think 2019 will indeed be the year Amazon specialists are in the ascendancy. The key question is which business will be to Amazon what MightyHive was to Google? The answer to this could be Acorn Intelligence:
The business was co-founded at the start of 2019 by two (very) senior former Amazon execs: Ross Caveille who up until recently was Amazon’s GM for their DSP in the EU (& prior to that was the head of Biz Dev for A9) & Claire Leon who up until December was Amazon’s Agency Development Lead in the UK.
This high growth market will no doubt get competitive very quickly, but based on their extensive knowledge of the platform (& presumably killer contacts at the Seattle based giant) Acorn-i should be well placed to compete & help brands understand what is an increasingly complicated retail space be that through content optimization, fulfillment or advertising, fighting off other start-ups in the process.
Acorn-i are already drawing comparisons with MightyHive not only because of their founders are former employees (MightyHive is led by Google’s former Head of Biz Dev) but also because they are landing in market just as the key system of record reaches critical mass, MightyHive launched in 2012, months before the re-brand of Invite Media to DBM & Acorn-i launches as Amazon’s DSP has just re-branded and is very much in the ascendancy. The parallels with 2012 are a little uncanny at this point & it’ll be very interesting to see this start-up develop through 2019 & beyond.
Beeswax Raises $15 Million In Series B Round
Even for high growth AdTech start ups investment can be hard to come by these days, so it was good to see on Tuesday this week Beeswax announcing they had raised $15 million in Series B funding:
This latest round of investment means Beeswax has raised a total of $28 million since it was founded in September 2014. The business has around 75 advertisers on its roster & counts Amazon’s streaming platform Twitch & Foursquare as clients.
Beeswax currently has 65 employees and is said to be looking to double in size by the end of 2019. Currently around 40% of spend through the platform is on video & the business will look to build on this foundation over the next 12 months, with connected TV an area of focus.
This focus on video is very sensible given that it is a high growth channel & their CEO @AriPap has a wealth of relevant experience in this area, including authoring the VAST standard for online advertising & leading the development of Nielsen's Digital Ad Ratings (DAR) product (which certainly puts one’s own accomplishments into perspective…)
Beeswax had a great 2018 & grew revenues 150% YoY, but what’s going to drive growth in 2019 beyond organic growth from existing customers & new channels? According to some in the trade press because the agency sector is already dominated by incumbents (like The Trade Desk & Google) Beeswax are going for target advertisers in housing their programmatic. This makes certainly makes sense in the US where 1 in 5 brands is going in house but it’ll be interesting to see how they approach things outside of their home market.
Whatever happens I think Beeswax are well placed to grow, I expect that as programmatic moves into higher yield channels the combination of a SaaS model rather than a % of media fee & full transparency into decisioning will both prove to be a compelling option for more and more programmatic buyers both in house & beyond.
Google Fined In France For GDPR violation
From Start-Ups in their ascendancy, to Giants in trouble with law makers, this Monday Google was given the biggest GDPR fine to date: $57 Million by French lawmakers:
The French lawmakers believe that amongst other things:
1) Information provided by Google was not easily accessible for users.
2) Information was not always clear nor comprehensive.
Beyond this lawmakers found that user consent could not sufficiently informed & that the collected consent was neither “specific” nor “unambiguous” due to the information on processing being diluted across several documents & because of the sheer number of Google services (Maps, YouTube, Assistant etc) involved in processing.
Google can appeal the decision, but it’s not clear if they will do so, whilst non trivial it is worth noting the fine is relatively modest compared to the maximum 4% of their world-wide annual revenue that a GDPR fine can be. Consequently many have viewed this as a warning shot not only to Google, but to other AdTech businesses.
This will be of some concern to some AdTech businesses, as whilst Google’s own tools have been judged to have fallen short in this instance, some have commented that other businesses still don’t offer as nuanced controls as the Mountain View giant & that the controls for other vendors are harder to find. Judgement’s always help to clarify laws & I’m sure that off the back of this some businesses will be seeking to improve their controls based on this ruling, it will be interesting to watch this play out over the next 12 months.
Viacom Buys Pluto TV - Telaria & Hulu Extend Partnership
It was another massive week in the connected TV world, with two big stories. First up is news that Viacom is buying Pluto TV, a free ad-supported streaming service which was founded in 2013, for $340 million in cash:
Pluto TV is available via Apps on Samsung & Sony TVs as well as devices made by Roku. It has 12 million active users who can chose from 100+ ad-supported channels & free on demand content from 130 content providers including their acquirer Viacom who also own MTV & Nickelodeon
Their user base is around half the size of Hulu, but as with many streaming services growing at a clip, as people increasingly cut the cord. Around two thirds of subscribers are using the service via a connected TV & half of Pluto TV’s audience is 18-34 so whilst the service is not massively scaled yet, it will mean Viacom has acquired an asset which will allow them to sell advanced TV advertising against an increasingly difficult to reach audience.
The other big story broke on @AdExchanger was that Telaria have struck a two year deal with Pluto TV competitor Hulu, to power its PMPs. The deal is an extension of a partnership that first began in 2017.
Mark Zagorski, CEO of Telaria said the two business would develop an “intimate relationship with Hulu’s development team to build features that can help advance their business” one area of collaboration will see Telaria develop custom adserving solutions with Hulu to ensure when they serve an ad onto a 55” OLED the quality is as good as that of a mobile phone.
The connected TV market is really heating up, The Trade Desk announced that Connected TV has grown 10X YoY & the supply side is working hard to keep up with this demand. My take is it’s good to see traditional broadcasters & media conglomerates (especially in the US) embracing the potential of connected TV & programmatic advertising to deliver end users more relevant ads, whilst maintaining lower ad loads.
There was so much AdTech news this week that I thought it would be good to share with you the articles outside of those that made it into the main newsletter with you:
Oracle Allegedly Shorted Women & Minority Workers $400 Million In Wages
Google Cloud inks $110 million deal with OpenX
Another YouTube Channel Sells For Millions
Let me know @SimonJHarris on Twitter if you think I should keep this as a feature in next week’s newsletter?
Okay that’s the newsletter done for another week & thank you for making it this far!
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Thanks & have a lovely weekend