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Amazon Q3: Ad Revenue Category Up Amid Weak Earnings

Amazonq3Amazon remained tight-lipped about its developing ad network during the company's Q3 earnings call, about which CFO Thomas Szkutak only said: "There's not a lot I can say there."

Amazon's "Supplemental Revenue" category, which includes advertising, Web services and co-branded credit cards, raked in $1.3 billion in Q3, up 40% YoY from $960 million. Amazon's supplemental revenue fared less favorably in international markets, as the company reported a 17% decrease to $42 million in that category.

A number of analysts called out the "vast difference" in growth rate between domestic and international markets. Szkutak acknowledged "the softer growth rate across a number of geographies," despite Amazon's interest and investment in global expansion.

Amazon, which in the last quarter, launched the Fire Phone and dropped about $1 billion on live gaming platform Twitch, reported operating losses that were close to $550 million, citing a $170 million charge for supplier commitments due to weak Fire Phone sales (it had $83 million in unsold inventory in Q3).

Szkutak didn't offer much about Twitch, saying: "It’s a really creative team doing innovative things on behalf of their customers and we are excited to have them as part of Amazon."  (more…)


Nielsen Reiterates Commitment To Digital During Q3 Earnings

NielsenQ32014We live in a world of media fragmentation, said Nielsen CEO Mitch Barnes during the company’s Q3 earnings call. And Nielsen, which reported Q3 revenue of $1.6 billion, a YoY increase of 13.3% (excluding its recent acquisitions of consumer research company Arbitron and market research firm Harris Interactive), wants to help measure it.

Net profits, however, continued their slump from last quarter, falling $91 million from $134 million year-over-year.

“The video landscape is evolving and that creates a growth opportunity for us,” Barnes said. “Fragmentation continues to increase and behavior is shifting as consumers take more control over when and how they choose to view content – and as they do, we see it’s not a zero sum game.”

That’s because, despite flatlining consumption of traditional television, digital video viewing shows no signs of slowing down. According to Adobe’s most recent video benchmark report, online TV viewing shot up 388% year-over-year.

“Choice leads to more, and this is true across every demographic,” Barnes said. “Nielsen is positioned to measure all of that viewing, both traditional TV and digital video.”

All in all, it’s proving to be a busy year for Nielsen. The company introduced mobile measurement functionality for its Online Campaign Ratings (OCR) offering in July, mobile measurement for TV in September and, finally, the beta version of Digital Content Ratings (DCR) in partnership with Adobe, which launched just this past Tuesday.

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Alliance Data Systems Anticipates Conversant Will Increase Revenue To $6.6B

ads alliance dataAlliance Data Systems (ADS) reported Q3 2014 revenue of $1.3 billion, a 20% YoY change, mostly driven by the company’s private-label credit card services division, which saw 17% YoY revenue growth to $622 million.

ADS has steadily increased its outlook with each earnings call, and it did so again in its Q3, raising its core earnings per share (EPS) guidance by $.05 from Q2 2014.

ADS made a splash in the ad tech world when it agreed to acquire Conversant for $2.3 billion on behalf of its marketing data subsidiary Epsilon. Once the deal finalizes – ADS anticipates it’ll close by Jan. 1 – company President and CEO Ed Heffernan said he anticipates ADS revenue will increase 25% to $6.6 billion, raising core EPS to roughly $14.80 to $15, a 20% increase.

Heffernan emphasized this figure was just “a stake in the ground” and that ADS will refine the number.

Heffernan also noted growth in ADS’ other business units, including 52% YoY revenue growth to $324 million for airline loyalty program provider LoyaltyOne and 6% YoY revenue growth to $378 million for Epsilon. (more…)


Holding Ad Tech: Matomy Insiders Sell 20% Stake To Publicis Groupe

ofer-druker-matomyPublicis Groupe will acquire 20% of Matomy Media Group, an Israeli performance marketing company that recently went public on the London Stock Exchange, the companies said Monday.

The investment will not generate cash for the company's coffers, going instead to a small group of individual investors, but CEO Ofer Druker said it will result in collaboration between Matomy and Publicis-owned agencies.

Under the deal terms, Publicis will invest about $60 million to snap up 17.9 million shares of Matomy stock from a small group of individual investors that includes Druker and Chairman Ilan Shiloah. The agreement comes with an option to buy another 4.9% worth of Matomy shares.

"Publicis will be able to work with us on three main elements," Druker told AdExchanger. "One will be to include us whenever it makes sense in their media-buying activities. The second is Matomy is planning to grow to more territories; next will be Asia and Eastern Europe. Publicis has a strong ability to help us start building our presence there."

Third, he said Publicis will aid Matomy's efforts to diversify to new industry verticals such as "fashion, ecommerce, and so on where we are still not strong." The company's roots are in finance, education and other performance-obsessed categories.

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Qubit Raises $26M From Accel Partners For ‘Predictive Data’ In Ecommerce

GrahamCookeLondon-based ecommerce personalization tech company Qubit has raised $26 million in a Series B round led by new investor Accel Partners.

Existing investors Balderton Capital and Salesforce Ventures also participated in the round, which brings Qubit’s total financing to $36.5 million to date.

“Our new funding is for continued investment in R&D, and we have some very exciting developments in predictive data and empowering marketers to take control of their optimization strategies,” company CEO Graham Cooke said. “We’re also continuing to scale up our sales, professional service and marketing teams in the US and Europe… (and) the plan is to IPO when the business is ready.”

Qubit is among a handful of tag management systems (TMS) like Ensighten, Signal (formerly BrightTag) and Tealium, whose technologies track and codify data signals and, oftentimes, run advanced analytics on top of that traffic flow. In Qubit’s case, tag management is a part of a broader portfolio of audience segmentation and online personalization apps developed by a bunch of Google alums.

Qubit helps retail customers ranging from Staples to Jimmy Choo create what company Cooke calls “Visitor Clouds” of first-party customer data.

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In The New Wave Of Social Marketing M&A, Facebook PMDs Call The Shots

SecondSocialThe participants in a new race to snap up social marketing technology companies aren’t the usual enterprise software suspects. In the latest wave of consolidation, Facebook Strategic Preferred Marketing Developers (PMD) are buying each other.

Search and social software company Kenshoo this week moved in on Adquant, a social ads platform specializing in mobile apps and games.

Similarly, video ad server Mixpo purchased rich media platform and Facebook PMD ShopIgniter to pave its way into paid social. Social media management platform Sprinklr snapped up Dachis Group and TBG Digital and HootSuite grabbed BrightKit to do the same.

“If you look at the simple fact that more media buying is getting disintermediated and going in house, more social planning and execution is going in house, too,” commented Julie Hopkins, research director at Gartner. “What’s driving it is the increased movement by social providers into the paid media space. You require the paid amplification to get the reach you used to get organically.”

To the casual observer, it may seem like some of the smaller PMDs are waving the white flag and understandably so – social is but one rung on a ladder in a wider portfolio of data management and analytics considering enterprise competitors like Adobe Marketing Cloud.

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Adobe's Strong Q3: Marketing Cloud Wins, Uptick in 'Large' Deals

AdobeQ3Adobe's fiscal Q3 was relatively strong as the company reported $290 million in revenue for its Adobe Marketing Cloud portfolio of products, up from the $254.9 million recorded in Q3 last year. Adobe Systems' total revenue was $1 billion in the quarter.

Overall, Adobe Marketing Cloud cited strong customer adoption in the third quarter, counting British Sky, Ford Motor Co., H&M, the US Department of Treasury and Adidas among key client wins.

"It really is in our best interest to manage and deliver the entire customer platform," said Shantanu Narayen, Adobe Systems CEO, during the company's Q3 earnings call.

Although he cited Adobe Campaign (formerly Neolane, the cross-channel campaign tool it bought about a year ago) and Adobe Experience Manager as key drivers for the overall marketing portfolio, "we're seeing an increase in multiyear deployments as well as [selling] more solutions within existing customers," which is leading to increased "stickiness" around the entire cloud portfolio.

Narayen said a combination of factors contributed to the traction this quarter, including an increase in size and volume of transactions, international expansion, growth in partner business, as well as a shift in perpetual to term-based contracts, which indicate larger, multiyear agreements. (more…)


Mobile Player xAd Snags $50M In New Funding, Says It Doesn’t Even Need It

xAdfundingFollowing a $50 million infusion of cash Thursday, mobile location vendor xAd appears to be sitting pretty. The money is a combination of equity and debt financing. XAd is not publicly disclosing the split.

According to CEO Dipanshu Sharma, the company doesn’t “have any immediate plans for the funding,” which came courtesy of Institutional Venture Partners, Emergence Capital, Softbank and Silicon Valley Bank. Although Sharma declined to share the company’s valuation, reportage via VentureWire placed xAd’s worth at about $250 million.

“We have enough self-generated profit to fuel our expenses and product leadership,” Sharma said. “However, we’re continually evaluating strategic acquisitions that have potential to further strengthen our market leadership and global scale.”

Sharma would not comment on specifically what type of companies xAd might acquire down the line. When asked to what extent xAd sees itself as a potential acquisition target itself, Sharma basically said that it doesn't.

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Alibaba’s Q2 Revenue Nearly Doubles Year Over Year On Road To IPO

AlibabaJust days shy of its IPO, Chinese ecommerce giant Alibaba Group reported Q2 revenue of $2.54 billion, a 46.4% increase over last year, while net income skyrocketed to $1.99 billion. The company could raise close to an additional $20 billion out of the IPO based on an average valuation of $168 billion.

In a revised F-1 the company filed Wednesday with the Securities and Exchange Commission, Alibaba also noted positive growth in average mobile monthly active users, which increased from 163 million in March to 188 million at the end of June. Active buyers totaled 279 million, more than double the number last year.

Alibaba makes its money primarily through its Taobao Marketplace and TMall properties, which nearly doubled in gross merchandising volume last quarter to $296 billion with close to a third of that volume coming from mobile.

For the most part, Alibaba’s merchant-driven and the company charges on a fee and commissions basis for online marketing services via the Alimama platform. Alibaba also runs an ad network and exchange business, which is the culmination of a merger between its affiliate network and Taobao Ad Network and Exchange. Cloud computing services, much like Amazon Web Services, is another revenue driver for Alibaba, with that figure now north of $100 million.

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AppNexus Attracts Public Equity Investment, Now Valued At $1.2B

BrianOKelleyThe independent ad tech company that powers more than 30 billion ad impressions per day through its platform is now, officially, a $1 billion-plus business.

AppNexus revealed Monday it has closed a $60 million investment round from an unidentified Boston public equity and asset management firm, valuing the company at about $1.2 billion. At the time of this writing, the company expects up to $40 million in additional financing to follow from “other interested parties” in the coming months, which would make the new investment total nearly $100 million.

The company’s past raises have totaled $140 million. AppNexus has also increased its debt facility to $75 million, extendable to $100 million.

Rather than riding the ad tech IPO train and weathering the ups and downs of Wall Street, for now co-founder and CEO Brian O’Kelley said the public equity financing will give AppNexus the currency it needs for future M&A, to “aggressively” ramp up on engineering talent and further global expansion.

He spoke with AdExchanger about the deal and ad tech investment landscape at large.

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