Home Ad Exchange News Snapchat Acquihires The Flite Team; Alternative Funding Sources Fill The VC Gap

Snapchat Acquihires The Flite Team; Alternative Funding Sources Fill The VC Gap

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Snap, Take Flite

Snapchat has, er, snapped up rich media ad server Flite. Recode gets the scoop, characterizing the deal as an acquihire. A sign of things to come? Kurt Wagner writes, “Snap is entering an important stretch for the company, especially when it comes to ad tech … Its ads API, which will let marketers automate their ad buys using bidding algorithms, will likely be a major revenue driver once it’s up and running.” Read on.

In The Red

As VC throttles back on ad tech [AdExchanger coverage], other funding sources have filled the gap. That includes private-equity Chinese holding companies and a cadre of ad tech founders who invest in industry startups. It also includes debt. Bloomberg’s Lizette Chapman reports a growing debt-financing trend among tech startups. The ad tech firm Metamarkets took a loan this year to avoid share dilution (having raised $40 million), and the marketing creative automation firm Persado ($66 million in the bank) is looking to secure a loan of $30 million or so in 2017. “Interest rates are low, and you avoid dilution. It’s a no-brainer,” says Persado CEO Alex Vratskides. But unlike VCs, lenders are unforgiving if business slips and payments are missed. “Silicon Valley buries its dead very quietly,” says Metamarkets CEO Mike Driscoll. More.

About That Report…

The Department of Justice’s investigation into agency bid-rigging for production work could have far-reaching implications. Bid-rigging was mentioned in the original draft of this year’s ANA/K2 media transparency report, and the new probe may reawaken the investigation, reports Lara O’Reilly for Business Insider. “Sources have suggested to Business Insider that the subpoenas could lead the DOJ to extend its probe into the media-buying landscape too,” she writes. Pivotal analyst Brian Wieser echoed that prediction in a note to investors: “It would be unsurprising if the DOJ followed this investigation with another related to the allegations detailed in the K2 media transparency report earlier in the year.” More.

YouTube Paid

YouTube is quietly funding new artists’ marketing efforts to increase their success, and in turn, views and shares on its platform, The Wall Street Journal reports. For Korean pop singer CL, YouTube bought advertising in music publications, landed her single on FM radio and paid for a documentary and photoshoot in Fader magazine. The marketing efforts have grown her YouTube subscriber channel by 20%, or 51,000 people, while 99% of views come from non-subscribers. “We are continually discussing what we can do to further the amplification of the promotion we are providing,” said YouTube’s global head of artist and label relations, Vivien Lewit. More.

Cautiously Optimistic

The outcome of the US election raises uncertainty in many corners, including agency land. Adweek analyzes the stock performance of each major agency holding company and how its CEOs sees the financial horizon. Read it. A couple of analysts quoted here are upbeat about the potential ad industry impact. According to Tim Nollen, “The early indications [are] that Trump wants to promote infrastructure spending, reduce taxes, ease repatriation of cash, and if we see a rise in interest rates and increased inflation, all those would be good for advertising spending, if everything lines up right.”

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