ADOTAS – This doesn’t fit into my narrative about ad networks acquiring video appendages (as was the case with Undertone acquiring Jambo Media), but Tremor Media has gone and bought competitor ScanScout, combining the former’s impressive scale with the latter’s targeting and optimization technologies.
With Tremor and ScanScout serving 667.5 million video ads in September according to comScore, the combined entity (which will keep the Tremor brand) will be by far the largest independent video ad network (Brightroll is next up with 476.4 million), and second in the general video ad space to Hulu (794 million). According to AdAge, the company is looking to release an IPO in the next 18 months.
“By combining the companies’ strengths, we can deliver what advertisers have told us they’re looking for and create a clear must-buy in the industry for large online video budgets,” said Bill Day, who moves from ScanScout CEO to Tremor CEO with the merger. “Tremor Media is the largest video ad network serving the most advertisers with absolutely the largest footprint of premium publishers and targeted video inventory.”
The merged entity will offer a reach of around 100 million monthly uniques. Tremor and ScanScout’s combined technology will allow targeting by demographics and time of day as well as superior analytics and optimization services.
So who is going to scoop up this new entity? Are pure-play video ad networks really going to be competitive in the near future, or will video become an arm of display? Coincidentally, comScore reports Google served less than half the video ads Tremor-ScanScout did — 242.5 million. Perhaps independent video ad networks have some more life to give.
Then again, new Tremor Executive Chairman Jason Glickman tells AdAge that both Tremor and ScanScout are profitable or near-profitable (thanks for being so straightforward, Glick!) even though they’re still investing in technology. Tremor has received $80 million in funding and its 2010 revenue is expected to be around $75 million; the 2011 estimate was $110 million before the merger. ScanScout, which has garnered $17.5 million in funding, is looking at revenue around $25 million.