Adtech companies are getting traction these days. The successful introduction of Criteo onto the Nasdaq, followed by the introduction of Rubicon Project onto the NYSE, are great news since investors had shown little interest in adtech IPOs until very recently. In fact, many newly introduced adtech companies suffered spectacular stock depreciation shortly after their launch. For the record, YuMe and Tremor Video received mixed market feedback with falls of up to 70% of their value.
In light of this, the French market has good reasons to be proud of the recent merger of eBuzzing and Teads. The merger gave birth to a new French Tech challenger that is seeking to go public onto the Nasdaq in 2015. It has become clear that the video advertising market is the most dynamic segment of the advertising market. The countdown has now started for a time of large-scale operations.
As far as Ebuzzing Teads is concerned, their successful IPO will largely depend on how they are perceived by the market. While Ebuzzing had a good ability to distribute the video format, it lacked a programmatic video technology (SSP) until it merged with Teads. However, history has shown that the best performing companies on the stock exchange are those that have a technological lead.
One should therefore be wary of any “announcement effect”. The video advertising market is still in its infancy. As a matter of fact, market participants have widely differing views of how to approach the market and its challenges. On one hand, some businesses seek differentiation through advertising formats (ie. outstream vs instream). They push for a horizontal approach of the market, in which video takes market share from other digital formats, as in the case of outstream. On the other hand, other businesses aim to combine TV and online video audiences. With such vertical approach, the advertising experience is close to TV advertising (ie instream or preroll).
Buying methods are being automated as well. With a growth potential of five-fold in Europe between 2013 and 2017, trading automation is an essential aspect of the bet on video-advertising; It’s for that very reason that eBuzzing’s move towards Teads is a wise one. However, multiple types of players come up with different views on how to tackle the challenges of programmatic video: Some American adtech companies, such as AppNexus aim for a full integration of the buying-and-selling process. Others specialise in buy side solutions, as Turn and Tubemogul. Others, like Liverail and StickyADS.tv, target the video content publishers who wish to optimise the sale of their video inventory.
At this moment in time, it is mostly certain the market will foster two key aspects:
- The quality of a video inventory that meets the expectations of TV advertisers in terms of branding experience.
- A best-in-class technological advantage that translates into an increase in revenues for both advertisers and publishers.
Frenchtech have yet to show the world that they are capable of giving rise to a champion in the video advertising industry.