By European standards, the French are fearless when it comes to ad tech, and there are a number of credible vendors aiming to replicate Criteo’s success in video. Two of the best-known French video ad tech companies are Ebuzzing and Teads, who announced yesterday that they intend to merge their businesses, both of which focus heavily on ‘outstream’ formats (they’re the video ads you have probably seen embedded in articles i.e. ads that aren’t run against video content as pre and mid-roll ads are).
VAN spoke to Pierre Chappaz, CEO of Ebuzzing (also the founder and former owner of Kelkoo), and Loic Soubeyrand, CEO of Teads, to discuss why they’re merging, the competition from the major social networks, their plans for next year’s IPO and why France is leading the way on ad tech entrepreneurship in Europe.
Congratulations on the merger. Could you explain what drove you to decide to merge with Teads and what the new company will look like?
Pierre: We have known the guys from Teads for around two years now. Both companies have created the opportunity to create brand new advertising inventory through what we call ‘outstream’ formats. As there isn’t enough in-stream inventory, especially when it comes to quality inventory, we both created formats for video advertising that can be incorporated into articles and slideshows.
At Ebuzzing we wanted to move into the SSP business and to become more programmatic, and when we saw the progress of Teads who are now working programmatically with many of the world’s leading media brands, we thought it might be better for both our companies to work together. By combining both the ad network model and the SSP model, we will be better able to meet the needs of both brands and publishers.
Congratulations to you too of course. Both Teads and Ebuzzing have been early pioneers of the outstream formats, but you’re about to start seeing some serious competition from the major social networks. What do you think differentiates your offering from theirs?
Loic: The main differentiation is the context. We have a premium context. Today we’re working with premium publishers in 42 countries so we’re able to work with large global brands, which few companies are able to do apart from Google/YouTube, Facebook, AOL and Twitter. However, they are not premium publishers, but social publishers, whereas we work with publishers like The Economist, The Financial Times, The Guardian, Forbes, Le Monde etc. In all 42 countries, we have the top ten publishers in each country on our network. So we can work with luxury brands, automotive, tourism, which is a wonderful for advertisers looking for a premium context. This is something companies like Facebook simply can’t offer advertisers.
For those of us who have never taken a company public, could you explain why you are choosing to go public next year, why you chose the NASDAQ, and what advantages it will bring the company and its investors?
Pierre: We set up our operations in the US last summer and we’ve had a very good start to both the US market and the LATAM market, with offices in New York, Miami and very soon Chicago. The US is the market where we see the biggest opportunity as the video market is approximately four times bigger than what we see here in Europe, so we have huge growth potential there and a listing on the NASDAQ will increase our visibility and boost our American business. The second reason is that many analysts who understand the advertising market the focus more heavily on NASDAQ.
We want to raise additional funding as we want to become the leading player in the video advertising market globally. We need more resources to invest in technology and to add to the team of one hundred developers we have right now, plus we want to expand our presence in Asia where we are currently only working in Korea with some of the major Korean brands like Samsung, Hyundai etc. However, we’d also like to be working in China and Japan and expand our global presence.
Loic: We have a wonderful ecosystem in France. First, you have our entrepreneurial culture, where everybody wants to create their own project. Then the government has also been good to entrepreneurs. We do have some issues on the social side, so developers can be quite expensive, but on the whole it’s a healthy market full of people with great ideas.
Pierre: I agree that the ecosystem has a big part to play, especially in terms of talent. For example, Pascal Gauthier, who was the former COO of Criteo, has just joined our board, and we also have Marie Ekeland who was an early investor in Criteo. Pascal worked with me when we were building Kelkoo in the early 2000’s, so there are people in France who have experience of building large tech companies who contribute to a dynamic ecosystem.
We are closer to Criteo than we are to the pre-roll companies like Tremor and YuMe who are also listed on the NASDAQ, as – like Criteo – we are adding value to the inventory we create. Criteo is buying CPM inventory and creating value for advertisers by selling on a CPC basis. We do the same with publishers where we buy on a CPM basis and selling on a CPCV (cost per completed view) basis. We think that that corresponds best with what the brands want, where they want to know how many people saw their videos, not how many people had the opportunity to see it simply because the player is on the page. So we are revolutionising the video business model in the same way that Criteo did with display.