Telaria has more than tripled its stock price since Mark Zagorski took over as CEO almost two years ago.
Telaria’s Q1 revenue increased 42% year-over-year to $13.8 million, according to the company’s quarterly earnings report on Thursday.
Recently, the video ad tech company has been riding the tailwinds of connected TV (CTV) and OTT app growth. Billion-dollar ad tech companies like The Trade Desk or Xandr need broadcast empires such as Time Warner, Disney and NBCUniversal to move the needle. But relatively smaller businesses like Telaria can hitch themselves to faster-moving players like Pluto and Cheddar.
AdExchanger caught up with Zagorski on Telaria’s recent growth, and where the next opportunities lie in CTV and streaming video.
AdExchanger: A lot of the OTT audience attention is still in ad-free environments. Where is the impression and supply growth right now?
MARK ZAGORSKI: The MVPDs at scale [think of cable streaming services like Hulu or Sling TV] we’re already working with, so the growth right now is mostly in the app space. We’re bringing on companies like Cheddar that are digital first, but will be an important part of the breadth of impressions on the platform.
And acquisitions of companies like Cheddar by Altice and Pluto going to Viacom are good for us. Some of those players that are upending OTT models, now they have real marketing firepower to go out and drive more eyeballs to their content.
Why has it been a struggle for ad-supported options to gain traction relative to the big ad-free subscription options?
Consumers are now more and more comfortable building portfolios of viewing. It used to be someone probably had one or two between Netflix, Amazon, Hulu and HBO. But we see people broadening the number of apps and content sources they use. And when the number of sources grows, the budgets don’t. People only have so much money they’re going to spend per month on TV.
Right now what we think we’re seeing is people picking up the hybrid model with Hulu, or they like what Viacom can bring to Pluto content-wise, and so we’re seeing more impressions in places like that. Ad-supported models are gaining traction with consumers who want content but aren’t willing to pay for everything.
How tough is it to secure deals, like you have with Hulu, that are exclusive or nearly exclusive between you and the media company?
The market is trending toward consolidation on the buy side and the sell side. That’s a big reason why we think of ourselves as a software play and not a piece of the media. Driving exclusive or quasi-exclusive relationships with publishers is where we’re focused and how we transact.
Where we play, in premium video and CTV, those deals are done in private marketplaces. And for PMPs it’s less about the number of companies you have in the stack and more about how the technology works to optimize the auction and integrates with the media.
How so?
In a private marketplace, you invite certain partners to participate. It doesn’t make sense to open up to many sources like an open market, where you’re looking for that elusive bidder with some data or something that makes that target very valuable.
For a PMP, you know and control the demand in the stack. It’s about how you manage the auction dynamics and serve ads specifically for CTV, like ad podding across different channels or formatting the ads for bigger screens.
And what do you see in terms of competition for that supply? There’s a bunch of new CTV and OTT ad network types claiming access to this limited inventory.
Technology always trumps networks. If you look at the history of networks, there are no ad networks in display or in mobile any more. Those were highfliers five to 10 years ago and now they’re gone. Some industrious individuals will start ad networks and get some inventory here and there.
In the relatively near future, more than 90% of TV spend will be traded programmatically. And that’s going to be API-based integrations between a provider’s technology and demand tech like The Trade Desk or MediaMath or other known buyers. People will make a few bucks in the short run with ad nets, but we’re here for the long run.
