Millennial Media is at a crossroads.
With a new CEO and recent acquisition, the Baltimore company has made several moves to strengthen its position in the mobile advertising space and speculation over its next move is growing among industry insiders.
Last month, Millennial tapped ad tech veteran Michael Barrett to replace founding CEO Paul Palmieri, who said he was stepping down to pursue a new career. A former CRO at Yahoo and CEO of AdMeld (acquired by Google and now part of the DoubleClick ad exchange), Barrett is spearheading Millennial’s programmatic mobile offerings.
“The rise of programmatic mobile buying is happening at a fast pace and the company fits in a premium position to bring in that demand to our platform,” Barrett said during the Q4 earnings call.
To do that, Millennial must streamline its various mobile offerings. Through its JumpTap acquisition as well as its partnership with the real-time bidding (RTB) platform provider AppNexus, the company’s technology stack includes a data-management platform (DMP), a demand-side platform (DSP) and an ad exchange called MMX, as well as supply-side tools for app developers and publishers via its mMedia platform.
The company also has approximately 625 million user profiles that consist of behavioral, usage and location data points and patterns, which the company mainly offers to advertisers through its direct sales efforts, Barrett said.
Millennial could offer its user profiles to programmatic mobile buyers as well. Barrett declined to discuss the company’s plans for leveraging its data assets during the earnings call, but noted, “When you move into … the programmatic exchange world … nothing’s really off the table.”
The company should also leverage native ads, suggested Andrew McNellis, VP of equity research at Evercore Partners.
“We see Millennial’s entrance into programmatic buying and selling through Jumptap and MMX as the largest near-term growth driver, but we also see more integrated, or native, ad formats as another growth opportunity,” McNellis said. “For example, MoPub introduced native in-feed ads on their network in December, and we see no reason why Millennial should not do the same given that Facebook and Twitter continue to drive advertiser interest in these formats.”
Google, Facebook, Twitter and other companies have been rapidly eating up the mobile landscape with new ad formats, tools and resources and Millennial has yet to catch up. But whether Millennial will continue on as an independent company remains to be seen.
While companies that go public often become too expensive to be acquired, Millennial’s share price has fallen far short of the $25 initial share price it commanded when it issued an IPO in 2012. At the time of this writing, its shares were trading for $5.86.
Barrett’s experience developing and selling AdMeld suggests he could potentially do the same for Millennial and turn it into an acquisition target. In terms of buyers, Yahoo CEO Marissa Mayer has been on an acquisition streak and is looking to increase the company’s ad revenue, including mobile advertising.
In addition to Barrett, CMO Mollie Spilman is also a former Yahoo exec and Ross Levinsohn, the former interim Yahoo CEO who lost the hiring race to Mayer, recently joined Millennial’s board of directors.
Millennial’s mobile ad tech stack could be a logical fit for Yahoo, but it is unclear whether its former execs would be willing to reconnect with the Sunnyvale, Calif., company.
Richard Fetyko, SVP of Internet tech and media at ABR Investment Strategy, pointed to AOL as a strong potential buyer. AOL, Fetyko noted, “already operates a sizeable network business and [they] have little mobile exposure, plus there’s physical proximity [between their headquarters].”
Speculations about Millennial being acquired are likely to only increase, Fetyko added.
“As Millennial Media transitions to programmatic,” he noted, “its strategic value will rise and with it, the chance of a take-out rises as well.”
