Soon there may be a perfect TV ad for everyone
Simulmedia wants to help make TV ads more targeted like the web.- The startup has to date purchased TV ads on behalf of advertisers using data like people's credit card shopping history.
- Now the firm, backed by backed by $58 million in funding, thinks the market is ready to license its software.
When Simulmedia was founded in 2008, the idea of buying targeted TV advertising that goes beyond classic definitions like age and gender was in its infancy.
But now that more advertisers are trying to bring the sophisticated targeting tactics common in digital media to TV advertising, such as delivering ads to people who have just had a new baby and may be in the market for diapers, Simulmedia sees a bigger opportunity.
So it's shifting from holding marketers' hands when they execute advanced TV ad campaigns to handing them keys to the car.
Specifically, Simulmedia plans to start licensing its targeted TV software product, Vamos, to marketers and ad agencies.
Previously the company would buy ad space on various TV outlets on behalf of clients and use Vamos' tools to help place advertisers messages in shows that reach very specific target audiences, like minivan lovers for example. Simulmedia would also help manage these campaigns' performance.
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But now that more advertisers are looking to make data-driven TV ad buying a core practice, Simulmedia sees an opportunity to let them use its technology as they see fit.It's not unlike an evolution many ad tech companies go through. Often such companies launch as "managed service businesses," offering complicated technology that advertisers initially need help getting started on, and getting the most out of. Typically, they can be more labor intensive operations at the outset.
Down the road, many ad tech firms pivot to focus on licensing their software to clients on a monthly or yearly basis.
"We knew coming in when launching that we were a tech company that would initially be making money doing a full turn key solution for marketers," said Simulmedia CEO Dave Morgan."You can't sell software to people when there's not much for them to use it for."
Now, as Morgan noted, NBCU is planning to sell $1 billion worth of ad inventory using non-traditional Nielsen targets. Three other media giants, Turner, Viacom and Fox are collaborating on a new TV targeting software initiative dubbed OpenAP. Not to mention a recent Credit Suisse report which predicted a coming $100 billion market for targeted TV advertising.
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"As people start realizing that there is a there there, and they really start caring about this [market], they want expertise," said Morgan.Morgan says that he's got half a dozen clients testing using Vamos on their own. The hope is to have the product fully in the market by the fourth quarter of this year.
And while Simulmedia will still offer advertisers its full service buying and service option, theoretically those that opt to license Vamos will be able to plug in whatever data they prefer, create customized, targeted ad campaigns and tweak them on the fly.
Simulmedia has raised just over $58 million of equity capital from Avalon Ventures, Union Square Ventures, Time Warner Investments, Valiant Capital and R&R Ventures.