Video Ad IPO Redux! Contrasting YuMe With Tremor Media

Jayant Kadambi, CEO, YuMeVideo-ad tech firm YuMe has filed its S-1 with the SEC in hopes of raising $65 million in the public markets. The filing, expected by industry observers since the start of the year, comes less than a week after rival video-ad company Tremor filed its IPO. Among other video-ad firms in the wings for a public offering are and BrightRoll.

YuMe and Tremor have some things in common. Both are somewhat long-in-the-tooth video platforms, with their roots in the publisher network model.

Of the two, YuMe has a brighter story to tell. According to its filing, the company posted net income of $6.3 million between March 2012 and March 2013, reversing a loss of $11.1 million in 2011. In addition, revenues for the year ending in March 2013 were up 70%, to $116.7 million.

Tremor, by contrast, is far from profitability. In 2012 Tremor’s total revenue rose a mere 16%, from $90.3 million to $105.2 million year-over-year, while its net loss decreased only slightly, from $21.0 million to $16.6 million.

Tremor priced its IPO at $10 and has consistently traded down every day since, due in part to underwhelming revenue figures shown in its preliminary filing with the SEC.

YuMe employs a total sales and marketing staff of 155, with 120 based in the US.  In contrast, Tremor has been hiring more aggressively; the company has said it has about 249 staffers, up from 185 employees at Jan. 1, 2011.

Last year YuMe delivered over 8 billion video-ad impressions across all screens, including gaming consoles and connected sets, two areas the company has been concentrating on for years. It claimed to have reached 257 million monthly unique viewers worldwide during May 2013. Tremor doesn’t list its reach of uniques, but does note its data is based on more than 20 billion in-stream video-ad impressions delivered through the 500-plus sites in the Tremor Video Network.

Unlike Tremor, Redwood City, Calif.-based YuMe has avoided positioning as a “programmatic” player in the video-ad space. The concern has been that too many marketers and publishers/broadcasters view programmatic as catering to bottom-of-the-funnel, direct-response advertising as opposed to the more lucrative brand campaigns that are closely associated with prime-time TV.

“We do have a small amount of ad sales coming to us through programmatic channels,” Ed Haslam, YuMe’s SVP of marketing, told AdExchanger last month. “Buyers have been conditioned to buy premium through a rep, like they do with TV, and to get direct-response inventory through platforms and programmatic. A buyer doesn’t know what you are when you do both.”

That said, YuMe does not want to be perceived as a Luddite and has spent heavily to refresh its capabilities. Earlier this year it bought Crowd Science, which came with its own sell-side platform, Citrus. And two years ago it acquired mobile-focused video-ad company Appealing Media. The primary reason for that deal, YuMe’s first acquisition, was the easy entry to the European market that the London-based Appealing Media would provide.

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