AdExchanger: Describe the Innovid platform.
ZVIKA NETTER: Our Atom platform runs pre-roll (interactive iRoll) and other formats across web, mobile, connected devices and we’re extended that into the TV world. We’re not active on the traditional TV dollar side, but we have insight on the digital side, and we absolutely see digital video budgets increasing where we are active with things like addressable, personalized and dynamic video.
What’s “pure video?”
In-banner video is not video to us. For us, it needs to be in-stream, in a player, before content, during content, after content. We’re taking the TV model and taking it to the next level in digital.
We signed an exclusive deal that whenever an Atlas customer needed a video solution, everything – the engine, ad server, iRoll – that it would run through Innovid, and it’s a deep integration with Atlas. We can start a campaign on Atlas, traffic it, it will run through Innovid and the data will go back to the Atlas dashboard. It’s a deep and strategic relationship.
I can’t talk too much more about it, but Facebook is extremely serious about it and they’re rebuilding their entire platform. And I think they’re investing in the whole tech stack with the LiveRail acquisition. We have many more direct to client relationships though, independently.
Do you have a DSP?
We made the decision to stick to the technology and commit to it. That’s the fixed CPM and the fact that we’re not tapping in to the media business. We’re not a DSP. We have all the functionality of a DSP, but a DSP is a commodity – you plug into LiveRail, AppNexus, any exchange really. We tell our clients that the way that DSPs operate today, it’s a media business. It’s not a platform business. So when Chrysler, for example, runs ads on TubeMogul, a DSP, Hulu, YouTube, CBS, AOL, Yahoo and across mobile, Roku, etc., 100% of those ads are going through us, being delivered, measured for verification and fraud. There’s no way they make money from video ad serves, though. The only way to make money for everybody else is to sell media through a DSP. Video ad serving is a terrible business in terms of margin. If all you do is traffic ads and run them and collect reporting, it’s a low CPM product and you’re providing managed services. You’re basically outsourcing the work of the agency.
How does Innovid make money?
We make money on iRoll and VOD and connected TV, where all the other players are going after the media dollars. We came to it not from an ad network perspective where there was tons of money to be made in the early ad net days. We made a decision we would be 100% technology focused, 100% media agnostic and that’s a very important distinction, because everyone sees the marketing and SaaS platform-model take off. There’s so much clutter and a lot of VC dollars are going into marketing, which hurts the whole industry.
Are you saying managed services and platforms are mutually exclusive?
Many of these guys are our partners and some are even our clients. TubeMogul, for instance, uses our iRoll technology, white labels it and that generates revenue for us, too. But at the end of the day, many of them are managed services. They’re a dashboard to buy media programmatically, and no one at the agencies besides the trading desks really has capacity or bandwidth to run this. At the end of the day, they hand TubeMogul an I/O, say “I’m looking to buy male/female,” they transact on that and they come back and say “you got this percentage viewability” and there’s so much room there to make money because it’s percentage-based.
The Innovid model is a fixed technology CPM. We don’t care how much money you spend, we care how many impressions went through our system, so it’s all volume-based. And we don’t have any media affiliation.
What’s your volume and headcount?
In 2013, we ran… about half of $1 billion. The media was not transacted through us and it does not flow through us, but if you want to compare apples to apples from a scale perspective, it’s comparative to about half a billion. We have 135 employees and 70% of our revenue comes from the US with 30% outside of the US. Global markets are growing insanely fast. We raised about $30 million to date and Sequoia Capital is our lead investor.