Tremor Video Cites Q2 Growth In Performance-Based, All-Screen Business

Bill-Day-Tremor-2013Tremor Video had a rosy Q2, with a 23.2% increase in revenue year-over-year to $43.7 million, up from last year's $35.5 million.

After a rocky entrance to the public markets one year ago, Tremor recouped its losses and improved gross margins. This quarter, Tremor experienced a greater net loss than in the second quarter of 2013, at $5.4 million.

Tremor cited strong adoption of an "All-Screen" video tool it rolled out commercially earlier in the quarter, with 56 advertisers including Six Flags theme parks now tapping the platform for cross-screen ad buys. Wall Street was particularly interested in Tremor's planned supply-side platform (SSP), which is expected to be a "material revenue contributor" to Tremor's $100 million-plus media business in 2015.

Supply-side deals have been among the hottest video ad tech trends of the summer. Facebook acquired LiveRail for about $500 million and European broadcast giant RTL Group swooped in and put a 65% stake in video SSP SpotXchange last week. This activity solidifies demand for pure-play buy-and-sell-side solutions, said Tremor CEO Bill Day.

"We firmly believe that as an independent company with premium publisher partnerships, we're in a very strong position in the market as an alternative to those [solutions] that exist within a large corporation," Day commented. "We also believe these deals reinforce our strategic investments in a complete programmatic solutions for brand advertisers and premium publishers."

Tremor's focus has been on maximizing performance-based pricing initiatives. Rather than pushing demo-based pricing (charging more on an audience basis than by performance or engagement), Tremor introduced a number of new pricing formats like CPQ units, or cost-per-conquest, so as TV buyers enter the fray through demo buys, additional performance-based products offer up-sell opportunities.

From a creative execution standpoint, TV advertisers will not rationalize budget shifts from traditional to programmatic video and mobile unless there are "immersive" and "in-stream" placements to meet demand, he said. Although Facebook and YouTube are collectively adding more inventory and "supply and demand are much more balanced, you do see supply sort of swing back and forth as new sources come in."

Day also said the company is "ahead of schedule" on the SSP roll-out; Tremor is beta-testing the platform in managing programmatic campaigns through its own media network, and "we're seeing strong results as we continue to integrate demand sources," he said. "We intend to announce a couple by the end of Q3."

Premium publishers are embracing programmatic video "carefully," he said, which is evident in the number of private  video marketplaces other video ad platforms Adap.tv and BrightRoll have facilitated in the last few months. Much of this is driven by demand from brand advertisers seeking access to inventory in what is perceived as a more-controlled environment, particularly if they're committing to considerably higher CPMs than display.

 

 

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