During Magnite’s most recent earnings call in August, CEO Michael Barrett highlighted the CTV industry’s growing interest in accommodating small and midsize businesses.
“We see the SMB segment exploding over the next three to five years through newer, specialized DSPs like tvScientific, Vibe, Streamr and more,” Barrett said at the time. “They’ll all need access to premium CTV supply through an integrated ad server and SSP; that’s exactly where Magnite is positioned to lead.”
So it’s not surprising that just over a month later, the SSP announced it would be acquiring one of those companies Barrett mentioned.
On Tuesday, Magnite announced it had acquired Streamr.ai, which specializes in developing AI-generated assets for small businesses to use in their CTV campaigns.
But Barrett’s remarks weren’t a hint at the upcoming acquisition, Magnite CPO Adam Soroca told me. Magnite has closely followed Streamr’s growth for the last year and a half, but this particular deal (the terms of which have not been disclosed) happened very quickly over the last month.
To learn more about the acquisition, I sat down with Soroca as well as Streamr co-founder and CEO Jonathan Moffie. Here’s what they had to say:
ADEXCHANGER: What is it about small businesses right now that make them so desirable to CTV vendors?
Jonathan Moffie: To make CTV a $100 billion+ overall business, we need to get millions of new advertisers from search and social into CTV.
AI was the missing point that helps them with creative automation and also eases the complexity of media buying. So it’s only now that it’s easy enough for millions of search and social advertisers to get into CTV.
Piggybacking off of that, what is it that small businesses want the most out of their CTV vendors as they’re trying to break in?
Moffie: AdExchanger had a great interview with one of our early SMBs, Trident Coffee, almost a year ago. It was an interesting case study where they were launching DTC on their site and wanted to drive incremental purchases.
But then in their follow-up campaign, their founder, Eric [Johnson], was like, “I absolutely have to advertise during March Madness. How much will that cost?” I was like, “It’s gonna blow your budget in, like, seven minutes.” He said, “I don’t care. We can say that we were on during March Madness!”
So the actual performance is what keeps them coming back, because they want to see a return on ad spend, but there is still the delight of being on the biggest screen in the household.
Soroca: And, really, the biggest barrier is the creative. Now, all the companies that we work with that bring SMBs in will have access to the Streamr technology that can automate that entire process.
What is your current client base like?
Moffie: Our full business line is more through the broadcasters, agencies and ad tech platforms, and then they have the direct relationships with SMB. So we’re enabling those customers to basically attract SMBs through the platform.
Soroca: Magnite has no intention to sell directly to SMBs. We believe that the market is best suited to our partners, our agencies and technology providers, who are specialized and cater to those markets.
Do clients ever come to you with concerns about the AI creative itself?
Moffie: Our 4.0 model is called “Authentic Storytelling,” and what that means is we train the model on the businesses reference images that are approved to run.
My high-level goal is to have one of our partners run something like a Super Bowl commercial, and everyone thinks, “Wow, this is a great commercial.” And then it turns out that it was AI, and they didn’t even know it. So the goal is to have very authentic, great commercials that are more cost-effective to generate.
Now that Streamr.ai is a part of Magnite, what’s next?
Soroca: Right now the plan is to keep the Streamr brand as is, so our agencies and broadcasters will be able to license the Streamr capabilities. And then, in the long term, how we bring that technology into the rest of the product portfolio is still to be determined.
Moffie: Agencies have been a priority. We have this storyboard product where we’re working with agencies like SearchKings, where we’re getting requirements from them and building on top of those. And we have some really interesting retail media networks that we already were working with ClearLine on, activating some pretty ambitious plans. So we’re bringing those closer to market.
This interview has been lightly edited and condensed.
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