ValueClick Sees 20% Organic Growth In Display In Q4; Spongecell Gets $10 Mil; McClatchy Says Segmenting For Digital

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ValueClick Grows

Ad network (affiliate marketing, technology and media company) ValueClick reported a better-than-expected Q4 2011 as the ad network model transitions to audience buying. The company's acquisition of Dotomi last year appears to be positively impacting the top and bottom line, too. Q4 2011 results included "revenue of $182.6 million, up 42 percent from the fourth quarter of 2010 (Q4 2010)." Estimates for revenue had been at $175 million. Read the release. More highlights: 20% organic growth in display advertising comparables and Dotomi will start cross-selling Commission Junction clients (direct marketers) this quarter. If ValueClick can unlock direct marketer dollars and then move on to the brand dollars, that could be big. It's certainly what ValueClick is gunning for.

Also from the call, regarding retargeters - including Dotomi - getting booted from buying Yahoo inventory on Right Media Exchange, the company said on the call that "they did not feel significant impact which is reflected in the [positive] numbers they showed in Q4." Zarley said that he'd still like his company to buy remnant inventory from Yahoo! especially as it relates to Dotomi's needs but didn't expect a lack of access to hurt his company going forward. Of note, Wall Street analysts picked on the Yahoo! inventory topic several times. Each time, Valueclick's response was essentially that they're inventory needs are still being met without Yahoo!.

Regarding ad exchange impact on 40-50% ad network margins, Dotomi, which is an exchange and sell-side platform buyer, positively impacted margins, so the public company claims their margins are actually going up. CEO Zarley said that they're a "big player in exchanges but a lot of traffic still comes from their [ad] network and even properties such as Valueclick-owned Investopedia." Zarley said that the impact of social networks (Facebook!) has NOT been lower CPMs. In fact, he said margins are better with audience targeting. Greystripe, the mobile ad network, now has 19 salespeople (used to be three) as they look to grow that business which sounds as if it's behind initial, internal expectations. BMO's Dan Salmon (AdExchanger Q&A) asked about ValueClick's relationship with Agency Trading Desks (ATDs) and how that'll work. Zarley said that in spite of initial concerns, their still isn't the expertise across ATDs. He said that agencies will still be part of ValueClick's client list in the future, some will go away, but others will be replaced by direct-to-marketer relationships.

Spongecell Takes $10 Mil

Rich media ad technology vendor Spongecell is upping the ante with a $10 million round of financing led by Safeguard Scientifics. According to the release, "proceeds will be used to fund Spongecell’s continued expansion including product development, sales and marketing, executive and staff recruitment, and other working capital needs." Read it. Safeguard Scientifics has also invested in a couple of financing rounds with demand-side platform MediaMath as the venture group appears to be all-in when it comes to ad tech and audience buying. Due to regulatory requirements, future Safeguard Scientific financial releases will likely reveal more about Spongecell's valuation at the time of investment. Read the Inc 500 results revealed last year. This marks one of the larger investments in recent months as consolidation for some and stasis for many more has taken over ad tech.

Buyer Beware

Canadian company Cyberplex, which at one point almost bought Burst Media, says that its Tsavo Media acquisition in May 2010 has resulted in a requirement "to pay Yahoo Inc $4.8 million for what the U.S. search company called 'low quality traffic' from ads on Tsavo-run websites last year." Ouch. Cyberplex says its already looking for "strategic alternatives" for Tsavo - meaning it will likely be sold. Read more from Reuters. Yahoo! may eat the $4.8 million says Cyberplex.

D.R. Machine

The world of direct response and lead gen saw a robust Q4 if you go by finance site BankRate's numbers. J.P. Morgan's Doug Anmuth reviews the earnings report and says in Wall Street staccato, "CPC drove majority of outperformance. CPC revenue growth of 123% - a significant acceleration from 63% in 3Q - was driven by increased pricing, monetization, traffic, as well as new products such as insurance tables. Lead gen, which includes CPA/CPL advertising, grew 43% driven by growth in the credit card vertical where Bankrate’s high-quality audience continues to be a differentiator. CPM advertising was +6% due to the company’s efforts to monetize a greater number of display ads on a CPC basis to drive higher monetization." The company made $424 million in revenue for the full year. Read the release.

Let The Users Segment

Sometimes the simplest targeting is most effective. At least, that's what Cisco is hoping as it bought the right to target 140,000 CXO's - "X" is for experience! In what it says was the first extensive use of LinkedIn's InMail (the site's email system), Cisco sent a link to a video with brand messaging tied to their "Built for the Human Network" campaign. Read about it on ClickZ. LinkedIn segmentation is set-up such that the site's users self-select their title (rather than add any old title) which makes it easier for advertisers to target -and for LinkedIn to sell ads against it.

News Adds (More) Digital

Newspapers aren't dead yet. In fact, after reviewing the Q4 2011 revenue report from newspaper publisher McClatchy, $42 million in profit doesn't look so bad. But the publisher clearly sees the writing on the wall as The Wall Street Journal reports, "To maintain the ad revenue momentum, the company said it would add digital sales staff and expand its sales training." Read it (subscription). And from the press release, digital can't help save print: "Our digital results include both digital sales bundled with print and digital advertising sold on a stand-alone basis. Our bundled sales have suffered with declines in print advertising causing total digital advertising to decline 2.0% in the quarter. But we were pleased to see an increase of 7.5% in digital-only sales compared to the 2010 quarter." Read it.

Have A Coke And Some Marketing Dollars

"We're cutting costs. And, we're reinvesting." That's Coca-Cola's plan as it looks to pour on the marketing gas while its nearest competitor, Pepsico, has stumbled to-date with its biggest brand's marketing plan according to Ad Age. Coca-Cola CEO Muhtar Kent provided "the high-level" with Wall Street anaylsts on the expected $500 million investment, "This program will further enable our efforts to strengthen our brands and reinvest our resources to drive long term profitable growth." Read more.

Ideation Nation

Former Invite Media CEO, now Googler, Nat Turner is thinking about the entrepreneur's "ideation" process and the ability to conjure up "what's next" in a post on his personal blog. He notes the cycles in ad tech: "It’s often said in the ad technology space, for instance, that the industry goes in 3-4 year cycles. First you had the ad servers, then you had the ad networks, then you had the ad exchanges, then you had the DSP’s/SSP's, etc..." Is he thinking a new opportunity may be on the horizon? Read more.

Moneyball Time

On Ad Age, and drawing inspiration from the movie "Moneyball," Media6Degrees President Penry Price says its time for marketers to step into the data-driven thinking batting cage: "Can we apply advanced statistical analysis to find new customers for brands, much as the A's found prospects in 1999? I, and many others, absolutely think so." Read it.

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