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ValueClick Becomes 'Conversant,' Seeks To Align Tech Assets

conversantValueClick’s gradual transformation from an ad network 15 years ago to an ad-tech provider  – focused on ad personalization and decisioning – entered a new phase Monday when it rebranded as Conversant.

The name, said CEO John Giuliani, represents the consolidation of the different technological components the company has assembled over the last several years.

“We’re perceived as individual business units, at least from a customer side,” Giuliani said. “And investors look at us as a bunch of different assets but aren’t sure how they fit together. In a year, we want customers to understand where we are in a single roof, and investors to understand how those assets work together more cleanly, and how that offers differentiation and utility.”

The feeling among these parties, he said, was that ValueClick’s “assets had become greater than the sum of its parts.”

ValueClick’s transformation includes the divestiture of its owned and operated (O&O) sites on Jan. 16. “That was the last divestiture we needed to move our assets to a place where they can all come together,” Giuliani said.

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Xaxis Buys Dutch Ad Net BannerConnect

xaxis-bannerconnectWPP Group's addressable media unit, Xaxis, has acquired Netherlands-based BannerConnect, a 10-year-old company that evolved from its roots as a traditional publisher network to embrace the exchange-buying trend.

BannerConnect has headquarters in Sittard and satellite offices in London and Amsterdam. In addition to bringing on the 40 employees in those locations, Xaxis gets technologies for digital campaign optimization and visualization. The suite, called Bright, will be rolled out in other markets where Xaxis operates.

"BannerConnect is a very tenured company in the programmatic media buying space," said Xaxis CEO Brian Lesser. "Our strategy has always been to acquire companies that enable our overall strategy: new products, new markets, new sales channels and scale." 

Terms of the deal weren't disclosed. According to WPP, BannerConnect's 2013 revenues were $5.8 million (€4.3 million) and its gross assets at the end of the year were $11.2 million (€8.3 million)

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Rocket Fuel's Q3: Margins Edge Toward 60%

George John, CEO, RocketfuelRocket Fuel is sitting pretty in its first quarterly earnings report since going public in September.

The company saw Q3 top-line revenue growth of 132%. Its customer base reached 938, up from 406 in the third quarter of 2012, and headcount grew to 552 – about on par with AppNexus. Press release.

Impressive as those stats may be to Rocket Fuel's investors, they're nothing compared to its margins – which jumped from an already robust 54% one year ago to 58% for the just-ended period.

Management sought to downplay the increase, which comes as some other ad-tech players feel pressure on margins. (Criteo's margin, for example, was 42% last year, according to its F1 filing, but only 40% so far in 2013.)

"We do not expect revenue less media costs to improve or even maintain current levels," said Rocket Fuel CFO Peter Bardwick. He said Q4 will likely see higher media costs, as a result of higher advertiser demand during the holidays.

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ValueClick Will Sell O&O Sites, Roll Out DSP

vclk-no-o-oValueClick will sell a bunch of websites as it pours all efforts into upgrading its wheezing display ad infrastructure. The company is also building a DSP, despite earlier claims that clients "wouldn't move to a DSP; there's not enough richness and personalization."

On the block are Investopedia, PriceRunner, Smarter.com, SymptomFind and CouponMountain.com. No word yet on the timeline for unloading these properties, which collectively delivered $28.9 million in Q3 revenues.

"Our planned O&O divestment is an example of our focus on driving the integration process forward and gaining further synergies from our core assets," CEO John Giuliani told investors on the company's Q3 earnings call today.

That integration includes closer alignment between the Dotomi retargeting business and ValueClick's traditional display ad network.  More on that in a moment.

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Four Questions For Rocket Fuel Post-IPO

Bill WiseAdExchanger asked industry leader and Mediaocean CEO Bill Wise his "take" on today's Initial Public Offering (IPO) for real-time ad platform and services company, Rocket Fuel.

The IPO netted Rocket Fuel $116 million and valued the company at approximately $1.8 billion at market close (stock quote).

Bill Wise:

On Rocket Fuel doubling and worth nearly 2 billion... HOLY $$$$$$HIT!!!

The big questions for them are:

  1. Can they continue their revenue growth while maintaining gross margin levels? Criteo had "rocket" growth, only to slow down and now their margins are mid 30's.
  2. Can they grow without adding labor and salespeople? They need to add true recurring revenue, more SaaS-like.
  3. Can they break through the billion dollar billings glass ceiling? This will require them to solve for attribution, global scalability, and policing bad traffic-- all which has haunted ad networks for years.
  4. Can they leverage this amazing market cap multiple to consolidate the space... And, in return, diversify their business?

 


Real-Time Ad Network Rocket Fuel IPO Nears $1 Billion Valuation

ipo-tremorReal-time ad platform Rocket Fuel amended its S-1 Registration statement (see it) to go public and revealed how much it will raise and how much it will be worth should all go according to plan.

The answer according to NASDAQ: "$102 million by offering 4.0 million shares at a price range of $24 to $27. At the midpoint of the proposed range, Rocket Fuel would command a fully diluted market value of $981 million."

A source noted that the valuation above may be a bit high. While eventually, Rocket Fuel might sell close to 4 million shares, the IPO calls for just under 3.5 million to be sold. Multiply that number by the mid-point price of $25.5 per share, and the valuation looks more like $828 million, not $981 million.

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Ad Network Takes Hit: ValueClick Sees Display Ad Decline In Q2

valueclickAn ad-network stalwart is struggling.

The earnings release on the SEC's site has few details on the display advertising performance for ValueClick, but the earnings call was another matter.

In spite of its acquisition of display ad retargeter Dotomi in 2011, ValueClick continues to search for solutions to shore up the company's growth potential.

Its Q2 2013 display advertising results, which primarily seem to be associated with ValueClick's legacy ad-network business (or, as CEO John Giuliani said, "insertion order-driven display business") showed a decline in the US. Companies like Yahoo and The New York Times can relate -- insertion order business for bulk buys of guaranteed and non-guaranteed media are on a slippery slope. The impression-based buy reigns, fueled by real-time bidding (RTB).

"We didn't see the monthly ramp that we did in the last Q2 [2012]," said ValueClick CFO John Pitstick. And results this past July apparently are not looking much better, according to Pitstick, who spoke to Wall Street analysts after the afternoon earnings release.

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Opera Mediaworks Launches Connected TV Ad Network

de Silva OperaMoving beyond smartphones and tablets, Opera Mediaworks introduced AdMarvel, an ad network for internet-connected TVs that brings together an ad exchange, ad serving and ad management functionalities.

"A connected TV looks a lot like a tablet computer," explained Opera Mediaworks CEO Mahi de Silva. "Given our experience in the tablet and smartphone space, as well as our experience in building HTML 5 runtime systems that are included in many connected TVs, we're bringing that ad technology to bear for these devices in the living room."

According to eMarketer, 35.1 million households in the US will have connected TV in 2013, rising to 41.3 million in 2014. With AdMarvel for Connected TVs, TV app developers and publishers can connect their inventory with buyers interested in reaching audiences via this new channel; the platform will display pre-roll and other ad formats to viewers on whatever application they are using on their TVs.

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ValueClick Reports: 2013 Is 'Transformational'; Affiliate Marketing Opp Ahead

valueclickValueClick announced after the stock market closed today that it has seen revenues grow 13% over Q1 2012 to $165.4 million on (GAAP) earnings of $0.34 versus $0.25 from a year ago. Read the release.

Aol's Daily Finance aggregated ValueClick earnings expectations before the release, saying that "the average [Wall Street] estimate for revenue is $166.7 million. On the bottom line, the average EPS estimate is $0.39." It's unclear if this is GAAP or non-GAAP. Nevertheless, Wall Street didn't seem impressed prior to the call, as the company's stock price tumbled 13% in after-hours trading – presumably on the revenue "miss" and diminished expectations about the future (keep reading).

ValueClick is a bit of a bellwether for the world of demand-side platforms, and specifically ecommerce media retargeting, since the company bought Dotomi in 2011. Dotomi's CEO and President John Giuliani took over the reigns as CEO of ValueClick late last year.

Giuliani is quoted in today's earnings release as saying 2013 is "transformational" for his company – code for "may be bumps along the way." But later in the release he says, "Google's recent decision to exit this market is a seismic shift in the competitive landscape, and we are prioritizing resources to take full advantage. The affiliate marketing industry and its customers are at an inflection point, and ValueClick stands alone as the company with affiliate marketing at its core." Can retargeting fuel the ValueClick fires? They've got the big-brand affiliate relationships through Commission Junction.

You can listen to the rebroadcast of the webcast here. Or you can read AdExchanger's "live" blog of the earnings conference call below.

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Collective Eyes Multi-Screen, Programmatic Publisher And IPO

collectiveHaving co-founded Collective in 2005, CEO Joe Apprendi has seen his company’s ad network reconfigured, if not entirely reimagined, as programmatic audience buying transforms the publisher ad network model. And as placement has given way to audience buying in recent years, Apprendi and his team have looked to keep pace with products such as its audience buying platform, known as AMP, and its newer TV Accelerator product aimed at media buyers looking to address TV audience online.

Today, Apprendi pins Collective’s future on multi-screen addressability: “We put the audience right at the center of our technology platform. Any screen that we can address with data in absolute or near real-time, that’s where Collective is playing. Those screens include the desktop environment, the mobile environment with tablets and smartphones, and eventually connected TV.”

Though declining to discuss exact revenues, Apprendi says business is booming with clients who include 76 of the top 100 spenders in the US.  He also claims that the average spend of those 76 increased by 40% from 2011 to 2012, while headcount at Collective is now “north” of 300.

AdExchanger spoke to Apprendi last week about his company and industry trends.

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