Oppenheimer's Simon Sees More Mergers And Acquisitions Ahead

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Todd SimonTodd Simon is Managing Director, Head of Digital Media at Oppenheimer & Co., an investment banking company. Simon is also on the Strategy Board of sell-side platform Rubicon Project.

AdExchanger.com: Given your background in investment banking, what is your take on today's M&A climate in the ad technology space?

TS: We expect a robust M&A market over the next 12-18 months, based on continued strength in the advertising environment, private capital raises for acquisitions, greater venture urgency for exits, and new public currencies. We are also seeing more dialogue around deals that produce scale and sub-sector leadership in online and mobile, cross-media combinations, convergence of adtech with gaming, social networking and ecommerce, and demand for innovative mobile and geo technology.

There has been a lot of talk about video bringing brand dollars online. How do you see this playing out?

It's happening now, with spending of $1.4b in 2010, up 340% from 2006, going to $5.5 billion in 2014. Looking ahead, we are very bullish on the space, and the unlocking of the $60b TV ad budget. As it stands, video is priority #1 for brand advertisers in sectors like auto, finance, travel, and food, while large sites are feeling the pressure to accelerate their video-related brand initiatives. In terms of changing the mindset, recent independent studies are confirming higher user engagement, in a medium that is fundamentally more measurable, more addressable. The supply side is perhaps the most challenging, and we are really excited to see companies like Cinesport, Healthination and Machinima cracking the code on high quality, low cost production of super-high contextual content. In terms of ecosystem development, we like the innovators RealGravity for syndication and Adap.tv for real-time bidding.

How big is the team at Opco and what are its plans around digital media?

Our digital media team includes six senior professionals and we have offices in Palo Alto, NY and Shanghai. Our plan is to continue to increase our resource commitment to adtech, mobile, and more broadly, in the digital media space.

What's the most difficult part of bringing two sides (acquirer and acquiree) together from your investment bank perspective?

Deal negotiations are so much more productive when commercial and strategic priorities are aligned and additive, and the deal rationale is tangible and quantifiable. An advisor with deep sector knowledge can engage the right parties and catalyze those discussions into a transaction.

What did you learn from your experience at Rubicon Project?

I think one of Rubicon’s great strengths is its ability to assess acquisition targets, in terms of management talent, bench strength, cultural fit, integration and technology endurance, which are critical to a successful acquisition program.

Any entrepreneurial interests yourself? Why is investment banking right for you?

Yes, I serve on the boards of several early stage companies in adtech and adjacent digital media sectors, which gives us insight to emerging technologies and trends, such as, the intersection of adtech with crowd-sourcing, game mechanics, and geo-analytics; and this enables Oppenheimer to provide our clients with cutting-edge strategic advice, which is very satisfying.

By John Ebbert

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