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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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Ad Net Pulse 360 Rumored To Be Shutting Down

pulse360Ad network Pulse 360, a subsidiary of Seevast, is on the brink of shutting down and may have closed its doors already, AdExchanger has learned. Pulse 360 issued a company-wide layoff in April and began looking for a buyer or new investor, according to a former employee who asked to remain anonymous. Pulse 360 founder and CEO Kent Keating has not responded to requests for comment.

Prior to the latest round of layoffs, the company had approximately 75 employees and 100 to 200 publisher partners, including MSNBC.com, CNN.com, ABCNews.com, Cox Media and USAToday. The company has an estimated 300 to 500 customers.

Traffic to Pulse360.com’s network has dropped precipitously from 124.7 million views in January of this year to 19.2 million in March, according to Quantcast. Calls to the company’s main line are directed to voicemail, and the site’s “client services” and “inquiries” pages have been deactivated.

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Travora Media, Formerly Travel Ad Network, Is Rolled Up

travora-advantageIt seems there's still a place in the world for ad network rollups. Investment company JMG Exploration, parent to an ad network of Internet access points called AdVantage Networks, has acquired travel ad network Travora Media.

With the acquisition, JMG will rebrand as MediaShift and position itself as a way to reach "on-the-go" Internet users.

Terms of the deal weren't disclosed, and the companies declined to answer questions on revenue growth or profitability. Management did say that Travora achieved gross media revenues of $12.9 million in 2011, but declined to share 2012 figures, suggesting revenues may have fallen at a time when budgets began migrating to programmatic media channels at the expense of some ad networks.

The deal comes weeks after a Skift report stated Travora is "shutting down." Commenters on that article claiming to be Travora executives and partners disputed that telling of events, and the acquisition this week suggests the company will indeed continue to operate.

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Analysts Positive on ValueClick, All Eyes On Dotomi

ValueClick's Q3 results were largely positive, as the company demonstrated in its earnings release and subsequent investors call on Thursday. But it just goes to show, that managing expectations is more than half the game when it comes to quarterly results.

In part, the results were impacted by the exclusion of revenues from Search123, which was sold at the end of September to Carl White, who ran that unit's European operations. Analysts expressed confidence in ValueClick CEO James Zarley's ability to build on the positive qualities of the U.S. media and affiliate marketing businesses, while improving its owned & operated sites' mix of traffic. But the big bet is on ValueClick's year-long integration of display management tool Dotomi, which it acquired in Aug. 2011 for nearly $300 million.

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