OFER DRUKER: Our focus since I arrived at Tremor has been video. After we acquired RhythmOne we have the full stack – DMP, DSP, exchange and SSP – including display ad offerings.
We believe video is strong enough to put our efforts into that one element. So we’re spending all of our resources there and thinking two or three years ahead, when I think we’ll look back and say this was clearly the winning format. And a company our size needs to have a focus.
What you see going on at the exchange level is the center is collapsing into one. There’s a need now to have end-to-end solutions. So you’re seeing most SSPs are trying to build demand-side business and DSPs are trying to have a presence on the media side.
It gives us good power in the market. And any company in the space now really needs to have that scale.
If you could snap your fingers and pick up scale or a couple points of market share in any particular category of ad tech, what would it be?
The DSP is our priority. We want to bring more demand on our platform and have more relationships with key brands.
Even with the SSP Unruly, that’s something we were looking for. They created something very interesting with the U7 group, a council of brands and agency buyers. They aren’t just an SSP. They also have sellers around the world pushing their publishers and formats.
Clearly Unruly’s relationship with News Corp was a major attraction, but what do you think of the prospects generally of those kinds of exclusive media relationships?
When I’m looking at the media side, people are not willing to give those commitments. Publishers know they’ll monetize more effectively using a combination of different platforms and direct sales teams to source demand.
How does it change your relationships on the demand side when you represent the sell side as well now?
I don’t think of it as us representing the sell side to the demand side. The market is more advanced than that. When you offer an end-to-end solution, you’re offering advantages.
For one thing, scale expands your selling opportunity. Unruly sellers go from offering essentially one format [the company is known for its outstream video ad units] to having the whole breadth of digital video, CTV and OTT. And having those commitments from respected media companies such as News Corp means you can go to buyers with better focus on what you can deliver.
Another advantage is the structure of costs. When you combine companies, there’s a lot of duplication of top-level execs, marketing and sales and some operation costs such as offices and HR. Typically I’d say a merger like this could save 10-15% if you cut the tech costs from one stack.
The biggest advantage might be that it frees up resources to focus on new products and functionality, instead of just the costs of platform maintenance.
Are you concerned about integrating different companies into a single ad tech stack?
We’ve consolidated the business into one platform, but not by trying to kludge the code together. When we acquired RhythmOne we evaluated the two DSPs and decided to move forward with Tremor’s as the underpinning for both. So we moved that activity from their platform to ours.
With Unruly, we’re also planning to integrate our technology directly into their products. We’re not looking to be a holding company. We may need to own a few brands in market, but at the infrastructure level everything will be united.
Do you expect the pace of M&A from the past year to continue?
Most startups in the market are for sale. Not necessarily because they’re in distress, but everyone sees what we’re seeing and understands that in order to be competitive they need to be bigger. It’s very hard to put the resources you need behind the business if you’re a small player in the market – with some tens of millions of dollars in spend on the platform, say.
What you see now are blocks of companies developing that are looking to acquire and connect companies to create an ecosystem that belongs to them. Those are companies like Zeta Global and Amobee, with Turn and Videology.
Are you still acquisitive or focused on putting together what you’ve already bought?
Certainly still looking around. When you’re able to acquire more companies and plug them them into a bigger operation, big portions of their cost drop to the bottom line. Those 10-15% savings I mentioned before go straight to profitability or reinvestment. So that’s a strategy we’re trying to strengthen right now.
Acquisitions are a big part of our global expansion plan too. Unruly fits in there, and others could. More and more big brands want a few key partners for their business around the world, instead of maybe working with dozens of vendors scattered around.
I believe there’s a window right now for the next 18 months or so to acquire some very interesting companies. After that, the window will close and all those deals that could create immediate shareholder value will be done.