The paltry price paid for Unruly rattles the consolidating ad tech market
News Corp announced on Monday it is offloading its video ad tech player Unruly to Tremor for a fraction of the price News Corp. acquired Unruly for in 2015.
With the transaction valued at about £15 million ($19 million), News Corp will receive about 7% of Tremor’s stock. Tremor is also guaranteeing News Corp £30 million ($39 million) in revenue over the next three years as part of the deal, in which Tremor will obtain the exclusive rights to sell outstream video ads across News Corp’s titles. (Outstream ads appear in articles but don’t sit within publishers’ video players.)
Monday’s price tag represents a haircut from the £58 million (then about $90 million) in cash upfront that News Corp paid for Unruly a little more than four years ago. News Corp had also set aside an additional £56 million pounds ($86 million) in performance-related earnouts, but it’s unclear how much — if anything — was eventually paid.
Loss-making Unruly was never fully integrated into its parent company and continued to work with other publishers, offering a marketplace that connects buyers and sellers to video ads. Its key competitor in this area is Teads, which was acquired by Dutch telco Altice in 2017. Meanwhile, News UK’s internal digital ad efforts have recently focused on initiatives such as its News IQ audience data business and its participation in The Ozone Project multi-publisher sales collaboration.
Unruly generated £43.5 million ($57 million) in revenue and an earnings before interest, tax, depreciation and amortization loss of £8.8 million pounds ($11.6 million) in the 12 months until June 30. Tremor said in Monday’s announcement that Unruly is expected to “positively contribute to adjusted EBITDA” in 2021, which would presumably mean a head count reduction is likely. Unruly employs about 350 people.
Unruly CEO Norm Johnston, who is joining Tremor’s board alongside News UK Chief Executive Officer Rebekah Brooks, said there will be “synergies” between Unruly and its new parent company, but he emphasized that the bigger opportunity is growth.
“It’s a very competitive industry with a lot of consolidation going on and while we could continue to grow organically, this [deal] enables us to take a quantum leap,” Johnston said. “It enables us to offer more ad formats, more scale, and more data — a lot of things that would have taken us longer to do.”
Tremor, an Israel-based company whose shares trade on the London Stock Exchange, has had an unusual history. The company was first founded in 2007 as Marimedia. It then became known as Taptica, having acquired a company bearing that name in 2014. In 2019 Taptica merged with fellow ad tech company RhythmOne (previously known as Blinkx) and later that year changed overall corporate name once again to Tremor International, a nod to its 2017 purchase of Tremor Video’s demand-side platform.
Tremor’s stock currently trades at a price-to-earnings ratio far below the average of companies trading on the London Stock Exchange. Tremor’s shares closed at 177.50 pence on Monday. Tremor CEO Ofer Druker said Tremor “is trading very low” contrasted to its performance and compared to its U.S. peers, but said the Unruly acquisition — and News Corp endorsement — is a good signal to the market about the company’s strategy.
“We are not just acquiring an asset, we are gaining a partner,” Druker said.
The ad tech sector is beset with a host of challenges, ranging from new data regulations, increased demands from advertisers for more transparency and the continued dominance of Google and Facebook. While there are a smattering of high performers like publicly traded The Trade Desk, many other companies have downsized, filed for bankruptcy or gone out of business altogether in recent months. Venture investors have largely cooled on the sector and an ad tech IPO hasn’t occurred in some years.
The Unruly-Tremor deal “doesn’t suggest valuations are high for ad tech,” media analyst Alex DeGroote said. “In this ad tech landscape, the spectrum for ad tech winners and losers is very wide.”
For its part, News Corp said the sale is part of a strategy to simplify its business. Last year the company also said it was reviewing strategic options for its News America Marketing business.
“Although the divestment will likely be seen as a setback for News Corp, the terms of [the] original earnout meant News was limited to the extent it was able to integrate Unruly into the broader business – at least in the shorter term,” said Paul Georges-Picot, director at advisory firm Results International. “It has been able to set the terms this time round and comes out of the deal fairly well.”
‘Off the field business’: Sports is still shaky but sports business publications see a lucrative play
The business of sports has been turned upside down and a number of media companies are racing to capitalize on the opportunity.
As the Facebook boycott ends, brand advertisers are split on what happens next with their marketing budgets
Of the top 20 Facebook advertisers, according to Pathmatics’ 2019 data, five of them -- Microsoft, Unilever, Diageo, Coca-Cola and CVS -- are keeping media dollars away from the social network.
‘No brainer’: Marie Claire launches sampling business to boost revenue and data practice
With retail on lockdown "Working in skincare, samples are the number-one way to get people into a product."
SponsoredAs live sports roar back onto screens, brands capture a social-media lift
By TJ Adeshola, head of U.S. Sports Partnerships at Twitter Live sports are back and sports fans couldn’t be more excited. It’s no surprise that communities across the country are welcoming their teams back with open arms. For many, the return of sports brings a sense of normalcy — 67 percent of U.S. fans see […]
‘Make bold moves’: How Allure is using its platform to challenge the outdated standards in beauty
Through the pandemic, seismic shifts have occurred in how brands can interact with customers. So beauty magazines, like Allure, have stepped up to provide a valuable connection between their consumers.
How the world’s biggest advertisers are spending (or not) as the pandemic grinds on
Having pulled back in Q1, some advertisers are gearing up for a big push in the second half of the year. Others are bracing themselves for a rocky road ahead.