CEOs and founders often say things like “one plus one equals three” when they’re talking about the value of an opportunity or some synergistic move they’ve made.
In the case of Mediaocean buying Innovid to merge it with Flashtalking in a deal worth $500 million, announced on Thursday, the math is more like “one plus one equals 11,” Zvika Netter, Innovid’s CEO and co-founder, told AdExchanger.
That’s not a reference to Spinal Tap, but rather to the notion that bringing these assets together creates “a multiplier of forces,” he said.
“We’ve been on parallel paths with different focuses, but the same commitment and belief that media and technology should be separate,” said Netter, who will lead the combined Innovid/Flashtalking division and report to Mediaocean CEO Bill Wise.
“It’s very tempting in this industry [to run a media business], because you can make a lot of money very quickly,” Netter added.
Which is one way to say “Google” without actually saying Google.
The Department of Justice estimates that Google controls 87% of the publisher ad server market in the US and 91% globally.
In 2021, Mediaocean acquired Flashtalking, which operates an independent ad server for advertisers, in a deal that was also worth around $500 million.
Combining Flashtalking with Innovid, which has a video-focused ad server and integrations with most of the major TV programmers, creates an omnichannel ad platform across digital, social, streaming and linear.
“There’s no other company, except for Google, that has everything in one place,” Wise said. “But what Google doesn’t have is neutrality and independence.”
Innovid will remain a publicly traded company – it IPO’ed through a SPAC in 2021 at a $1.3 billion valuation – until the deal closes, which could take a couple of months, according to Wise.
Its stock popped by more than 86% Thursday morning on the Mediaocean merger news.
Wise and Netter spoke with AdExchanger.
AdExchanger: Explain the rationale behind this deal, but no jargon allowed.
BILL WISE: We’ve both created great businesses, but there’s a competitor we have in common. The name starts with “G” and they might be under investigation for monopolistic practices.
The world needs independent ad tech companies at scale that aren’t conflicted, and this deal provides that to the buy side of the market. It just makes a lot of sense.
What’s something advertisers will be able to do because of this merger that they can’t do today?
ZVIKA NETTER: Marketers today can’t work with a single vendor that provides them with the best, most advanced ad tech in an independent, global way. That has never existed.
Why do this deal now?
BW: I think we’re seeing a tipping point. Marketers and their agencies are recognizing that they don’t want to rely on the world’s largest sellers to provide their buy-side ad tech.
Marketers might be sick of the walled gardens, but it’s not like they’ve stopped spending with them, though, right?
ZN: We have no problem with the walled gardens. But we believe that the technology being used to deliver and measure advertising should be separate from the media business. We’re saying either buy and sell media or be in the business of delivery, data, measurement and accountability.
A walled garden is not a bad thing. We work with YouTube. We work with Netflix. We work with all the large media companies. And we deliver and measure ads across these platforms. That’s our job.
BW: Advertisers need a foundational platform to allocate dollars and personalize creative, especially with more walled gardens out there. People always think of Google and Facebook, but that group now also includes Amazon and all of the retail media networks. And don’t forget that linear is the oldest of the walled gardens.
We manage frequency, creative and bean counting across all of these. You can think of it as complementary to the walled gardens, not competitive.
Flashtalking is an independent ad server with a big display business. Why do you think that didn’t come up more during arguments in the US v. Google ad tech antitrust trial in September?
BW: The main focus of the ad tech monopoly trial was on the sell side of the market with a keen focus on publishers, because Google itself is the world’s largest publisher.
I think part of what that trial missed is the dynamic of the world’s largest seller providing buy-side solutions, including an ad server, to marketers and their agencies.
One more question: Can you please rename the merged company Flash-ovid?
BW: We’ll take it under advisement.
Answers have been lightly edited and condensed.
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