Zeta Global Has A Muted IPO, But ‘We’re In It For The Long Haul’

teve Gerber, Zeta Global’s president and chief operating officer

Mar tech platform Zeta Global, or shall we say ZETA, became the latest unicorn to canter into the public market Thursday with its shares modestly priced at $10.

Although Zeta’s stock came in at the low end of the pre-IPO anticipated range of $10 to $12, and the first trade clocked in at just over $9, the company is still valued at more than $1.7 billion.

Despite a bull market for advertising and marketing technology stocks, investor exuberance is not guaranteed. Last month, tech stocks, including The Trade Desk, plunged en masse before recovering some.

Market corrections happen. But Zeta is playing the long game, said Steve Gerber, Zeta Global’s president and chief operating officer.

“We think about investors in the same way as we do about our customers,” he said. “We’re in it for the long haul and we want to win together.”

Zeta filed its S-1 paperwork in late April. The company reported $368.1 million in 2020 revenue, a 20.3% year-over-year increase, with EBITDA up 62.7% to $39.6 million on a net loss of $53.2 million.

AdExchanger caught up with Gerber on IPO day.

AdExchanger: One sentence, no jargon, what is Zeta?

STEVE GERBER: My son, who’s 12, asked me the same thing.

I focus more on what we do for our customers versus the assets and capabilities we have. We’re building a platform for customers to grow faster working with us than they could without us and driving superior business outcomes through a laser focus on customer success.

Did your son have any follow-ups on that?

He said, “No, what do you really do?”

We’re a marketing technology company that uses proprietary data, predictive AI and omnichannel technology to personalize interactions with customers at every touchpoint. And we’re helping our customers, many of which are multinational and have multimillion-dollar annual revenue commitments with us, to capitalize on the two main trends in the market right now: the acceleration of digital transformation and the embrace of data-driven marketing.

What do you want people to know about Zeta that they don’t seem to get?

There’s the belief by some in the industry that we’re a collection of businesses, but we are one Zeta. We’re one solution and one platform.

But Zeta has acquired a lot of what you might call distressed assets over the years, including the Sizmek DSP, Rocket Fuel DMP, IgnitionOne and PlaceIQ’s advertising business. I’ve heard the M&A strategy described somewhat facetiously as “welcome to the island of misfit toys.” What would you say to that?

We grow both organically and through strategic M&A. We think of our acquisitions as puzzle pieces. Maybe we acquire an asset like Rocket Fuel that has, say, seven pieces, but we end up using two of them. In that sense, it’s not who we bought but what are the components that can fit into the platform we’re building.

Rather than misfit toys, the analogy I’d use is that if you’re trying to build a great rocket ship or car, you need particular parts to make it the best in the world.

It may seem like some of our acquisitions are opportunistic, but for us it’s about a Venn of strategy and opportunity. We don’t acquire businesses or assets because it’s opportunistic, but because we’re trying to go in a particular direction.

Will Zeta’s M&A strategy change now that you’re a public company?

We believe that we already have the broader assets and capabilities we need combined with a product pipeline to achieve what we’re seeking, in terms of bringing on new enterprise customers and becoming embedded in the data-driven ecosystem.

So, we’ll continue to look at strategic M&A, but it’s not as if we’re looking at our portfolio today and saying, “We’re really missing X.” Historically, we’ve used M&A to accelerate our product road map.

Zeta’s S-1 called out the commenting platform Disqus, which you bought in 2017, as a secret weapon of sorts to help solve the cookie problem. How so?

Disqus is a key part of the overall business. It’s a publisher tool, but rather than something a publisher would use to monetize traffic, Disqus operates in many ways like a social network that allows people to comment, vote and engage – and to do that they need to opt in and set up a profile.

It’s a rich source of permissioned first-party data for us and a way for us to ingest behavioral signals tied to a person. We get unique inputs as well as more persistence and durability for our data set.

This interview has been edited and condensed.

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