Dave Morgan is a singular figure in the advertising industry. The founder of three ad tech companies, each in a way ahead of its time, is our guest on AdExchanger Talks this week.
In the late ’90s, Morgan built Real Media, an ad network/ad server business that was among the first to help publishers make money online. But Real Media, snapped up by rival 24/7 Media for a song during the dot-com bust, was not a great exit for Morgan or his investors, and so he charged ahead with his next company, Tacoda.
This time, Morgan would focus on audience targeting or, as he puts it in this episode, “serving ads to people on pages with some sense of behavioral intelligence.” This basic insight would provide the foundation for the programmatic trend. And when it was time to sell, Morgan and his backers did better: AOL shelled out $275 million for Tacoda in 2007.
He could’ve stopped there, but Morgan launched his third company, Simulmedia, a year later to bring digital-like buying methods to TV. Nine years in, he’s been at it for longer than either of the previous two startups.
In this episode, Morgan shares observations from his career and describes Simulmedia’s progress.
“Most of the things that have happened in the last 20 years around the advertising business were pretty predictable,” he says. “Their timing wasn’t necessarily and the exploitation of them may not have been, but you could … see patterns and analyze them over time.”
With Simulmedia, he says, “We’re making linear TV advertising as predictable, provable, performant and integrated into the enterprise as search and social.”
How long will that take? While ratings have collapsed for some prime-time viewing blocks, the total reach of TV among US consumers is as high as it’s ever been. TV audiences have grown more fragmented, making it hard for advertisers to capture the efficiencies they enjoyed previously – but that pain point is good for Simulmedia.
“Our focus and belief around TV, and why we’ve survived where companies like Google TV Ads, SpotRunner and Navic did not survive, is that we didn’t believe TV had a process problem,” he says. “It’s really a prediction problem. In TV, demand exceeds supply. It’s a futures market.”
Simulmedia is profitable, both on an EBIDTA and net revenue basis. “That is the most critical thing for any company that’s providing technology in the advertising and marketing industry, even if they’re new. The amount of new venture capital that’s going to come into this space is really limited.”
This post was syndicated from Ad Exchanger.