With cookies (finally) cooling off, contextual targeting tech is starting to heat up.
On Tuesday, ShowHeroes Group, a video and contextual targeting tech provider based in Europe, announced its acquisition of cross-screen ad platform smartclip LATAM (as in Latin America).
The rationale behind the deal is to help ShowHeroes Group bring its solution to the US and Latin American markets. The deal price is just under eight figures, although ShowHeroes declined to share the exact amount.
ShowHeroes has semantic targeting technology that helps publishers sell unused inventory by identifying the concepts and sentiment of video and connected TV (CTV) content and convert outstream ad slots into in-stream ones.
The goal is to serve as a one-stop shop of sorts, said Ilhan Zengin, CEO of ShowHeroes.
But ShowHeroes doesn’t call itself an ad network, because it also produces content, although its media business is “growing a lot quicker than the content business,” Zengin said. “And video is a completely different ball game.”
Which is why all publishers need a video strategy, he said.
Speaking of growth in media, ShowHeroes has been riding the M&A wave for a while. Smartclip LATAM marks its fifth acquisition since its rebrand from ShowHeroes to ShowHeroes Group in 2020.
Smartclip LATAM is an ad platform that reaches more than 300 million unique viewers across South and Central America, processing around 1.5 billion CTV ad requests per month. It claims it has the largest CTV inventory in the region.
Smartclip LATAM will help bring the contextual solutions ShowHeroes offers into Latin American markets, adding some multicultural flavor to its tech.
“Publishers need to be able to perceive cultural audiences and speech patterns that go hand-in-hand with our contextual plays,” Zengin said, referring to the critical role of contextual tech when it comes to identifying language in content.
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“[The industry] can’t think in terms of national borders anymore,” Zengin added.
CTV is still somewhat new in Latin America, a market where solutions for free, ad-supported TV are especially important since most audiences can’t afford to pay for multiple subscriptions, said Ángel Pascual, regional director of smartclip LATAM.
But this will be also ShowHeroes’ first entry into the US, where it plans to open office locations in New York, Miami and Denver.
“This acquisition is a really timely one for the US,” said Joseph Lospalluto, who is joining ShowHeroes Group as US country manager from an executive role at Smart AdServer.
Crafting high-quality content at scale is imperative because video is on a fast rise, consumption is at an all-time high, and media companies are getting gobbled up by bigger companies or bundled into private equity funds left and right, Lospalluto said.
“What these publishers need is to reimagine their content strategy with good, quality content and defined partners,” he added.
“Multiculturalism is also becoming a huge focus for a lot of brands and agencies,” Lospalluto said, referring to the growth of new populations in the US. “This acquisition ties in really nicely with the US multicultural lens.”
But the adoption of contextual targeting in American markets also has strong implications for the future of data privacy.
“A blessing in disguise”
The industry’s reembrace of contextual-first ad solutions in the face of impending third-party cookie deprecation is partially an attempt by countries that don’t have their own national privacy to try and emulate the EU, Brazil and other nations that do.
“[Data privacy] is a trend that’s coming to all the other markets,” Pascual said, referring to Brazil’s year-old data privacy legislation (dubbed the LGPD), which is fundamentally similar to the GDPR. It’s a matter of when, not if, he added.
Europe’s strict privacy region, including the GDPR, has been a blessing in disguise, Zengin said.
Although getting ready was a challenge, and all the back-and-forth consulting with big publisher clients was a pain, Zengin said, data privacy regulation highlighted that contextual campaigns can deliver results that are as good as those built on third-party data.
“Our booking rate has increased significantly since the decline of third-party data over the past two years,” Zengin said.
This article has been updated.
