Company also plans expansion into mobile ad space and a 2011 IPO.
Behavioral targeting-driven ad network Specific Media is hoping to capitalize on recent growth in online video advertising spend, and has acquired video ad company BBE to help it realize those ambitions. The purchase will give Specific an instant footprint in the online video space, with BBE's network currently reaching over 10 percent of U.S. users on a monthly basis, according to comScore.
BBE's media network will be immediately integrated with Specific's existing operations, with staff from the two firms consolidated under one roof. BBE's Vindico ad-serving platform will continue to operate under the BBE brand, however, and will seek to sell its technology as an independent offering.
"We've been looking at this space for quite some time," Specific Media CEO Tim Vanderhook told ClickZ. "We were trying to find a company that offered more than just a media network. Obviously that side is important, but the other pieces are the ad serving platform and BBE's original programming division," he said, predicting branded video content will "explode" over the next couple of years.
The company hopes its move into video will help it attract more spend from verticals such as CPG advertisers, which have been heavy early adopters of the format, but haven't historically gravitated towards display advertising. "It's easier to sell soap through a video spot than a banner ad," Vanderhook said, suggesting the merger will help plug gaps in both companies' repertoires. "Where they were strong we were weak; there's little overlap in our client base," he added.
According to Vanderhook, Specific plans to continue its expansion aggressively over the next twelve months, initially extending its new video offerings across Europe before turning its attention to a mobile advertising product.
"Mobile is very important to us. The question is whether we can make the right play in that space through one of our internal platforms, and do it organically, or whether we will need to get acquisitive," Vanderhook said, adding that the firm will seek to raise capital through an IPO at some point in 2011 if the financial climate allows. "The reality is, it takes a lot of capital to be an independent player in this space," he explained.
In the display ad space, Specific Media's data collection and behavioral ad targeting practices have attracted criticism from privacy advocates and scrutiny from legislators for a number of years. In August, the company was implicated in a lawsuit regarding its alleged use of Flash cookies to "re-spawn" HTML cookies for ad targeting, a practice the plaintiffs argue essentially removes users' ability to control the way their data is being used.
Vanderhook dismissed the suit as "ill-advised," arguing the company does not use Flash cookies for ad targeting purposes, and that the Network Advertising Initiative (NAI) has now effectively outlawed the practice completely. He conceded, however, that it has in the past used Flash cookies to re-spawn HTML cookies for purposes such as ad frequency capping.
Join the Industry's Leading eCommerce & Direct Marketing Experts in Chicago
ClickZ Live Chicago (Nov 3-6) will deliver over 50 sessions across 4 days and 10 individual tracks, including Data-Driven Marketing, Social, Mobile, Display, Search and Email. Check out the full agenda and register by Friday, Oct 3 to take advantage of Early Bird Rates!
Jack Marshall was a staff writer and stats editor for ClickZ News from 2007 until August 2011.
IBM Social Analytics: The Science Behind Social Media Marketing
80% of internet users say they prefer to connect with brands via Facebook. 65% of social media users say they use it to learn more about brands, products and services. Learn about how to find more about customers' attitudes, preferences and buying habits from what they say on social media channels.
An Introduction to Marketing Attribution: Selecting the Right Model for Search, Display & Social Advertising
If you're considering implementing a marketing attribution model to measure and optimize your programs, this paper is a great introduction. It also includes real-life tips from marketers who have successfully implemented attribution in their organizations.
September 17, 2014
September 23, 2014
September 30, 2014
1:00pm ET/10:00am PT