Archive for June, 2011

Admeld to be Acquired by Google

Almost exactly one year after the acquisition of Demand Side Platform Invite Media, Google announced an agreement to acquire Admeld, a leading Sell Side Platform. With this transaction, Google will extend its presence in the fiercely competitive digital advertising ecosystem with capabilities geared towards premium publishers.

LUMA Partners discussed the concept with Google and later represented Admeld in the transaction, which remains subject to US regulatory approval.

While not disclosed, most of the press has run with headlines touting a $400 million purchase price for the transaction. Assuming this is at least ballpark, it says a lot about the market for advertising technology. Here are some points to consider:

1. Real time media buying is real and valuable. There has been some debate of late regarding the RTB phenomenon – whether it is a fad or a long-term shift in the market and whether it adds real value. This acquisition should squelch that debate – as we point out in the SCIENCE-ification of Media presentation, there’s no going back.

2. Premium is where its at. Now that various targeting and optimization technologies are being perfected on remnant inventory (the only inventory publishers initially made available for experimentation), its time to focus on improving premium guaranteed inventory monetization. Admeld is a leader in these efforts.

3. Leadership matters. There are many companies in many categories in the display ecosystem (and video, social, mobile, commerce, etc.). It pays to have a leadership position.

4. Being bought, not sold matters. The best companies do not run banker processes that supposedly yield the “highest bidder”. Conversely, we believe that for dynamic technology companies such approaches actually sub-optimize. It’s adverse selection. This is the underlying premise of LUMA Partners’ go-to-market strategy. And it’s working – just look at our track record of successful deals that didn’t involve running a process.

DMS ’11

On June 8, 2011 LUMA Partners, along with MediaLink, hosted the 3rd annual Digital Media Summit. It was a huge success! Over 350 CEOs and other leaders from the digital media industry were on hand for a lively discussion of topical issues and power networking. Everyone was there!

DMS has stayed true to its original premise – to deliver a differentiated conference experience. With a plethora of industry and investor conferences, DMS is unique in that it is comprised exclusively of CEOs and the strategic and financial investors in their companies. Contrast that with the typical conference experience where a small minority of the attendees are decision makers. The format is different as well as our discussion forums are participatory. With a room full of CEOs, there is less distinction between panelists and audience and everyone is encouraged to get involved (or are Socratically pinged). DMS is a decidedly lean forward experience.

Our main stage panels were memorable. The Clash of the Titans pitted Ross Levinsohn and Jon Miller against David Kenny and Neal Mohan in a discussion of technology in media. The Buyside panel featured leaders from Adobe, CondeNast, WPP, Great Hill Partners and Union Square Ventures who discussed investment issues in the marketplace and the Winner’s Circle showcased four companies with recent exits to discuss their success strategies: Dapper, Demdex, Invite Media and Huffington Post. Finally, the CEO Soapbox track highlighted 24 unique companies in a speed dating pitch format. More info on DMS’11 can be found here.

This was the first year hosting the event as LUMA Partners and we are grateful for all who participated to make it such a success. We are especially grateful to all who sponsored DMS: Interclick, Millennial Media, Recruit, KPMG, Operative, Silicon Valley Bank, Yahoo, Acxiom, Admeld, Appnexus, AudienceScience, Bluekai, Casale Media, Collective, Exelate, Krux Digital, Media6degrees, MediaMath, Rocketfuel, ShareThis, SNR Denton, Great Hill Partners, JMI Equity, TA Associates, Technology Crossover Ventures and Roundarch. You rock!

We’re already looking forward to DMS’12 and pledge to keep up the quality and exclusivity. Meanwhile, we are busy working to fill the Winner’s Circle panel seats for next year!

Introducing LUMAscapes

The Display landscape slide is a big hit. It has been viewed over 100,000 times in more than 60 countries around the world and is referenced in numerous conference presentations, board decks, websites, blog posts, sales pitches and even investor kits. As ubiquitous as it has become, it only covers the tip of the iceberg — the display ad business.

Introducing LUMAscapes. We are debuting five new landscape charts to create a complete set of the seven key sectors of digital media: DISPLAY (the classic), SEARCH, VIDEO, MOBILE, SOCIAL, COMMERCE, and GAMING, branded as “LUMAscapes”. All but Gaming are available for download now from the Resource Center tab of this site.

What’s interesting to discover is how increasingly interconnected these digital sectors have become. Think about the relationship between search and display… or display and video… or search and commerce… or social and commerce… or mobile and social. You get the idea.

At LUMA, we are excited about the opportunity represented by the digital channel. And yet there is inevitable chaos until the sectors mature. These LUMAscapes are a good first step in helping define the ecosystems. We utilize these charts with the large strategic acquirers to help them determine their appropriate growth strategies and for target identification. We use them in discussions with entrepreneurs to understand where they compete — and where they can expand their businesses. And we use them with investors to discuss market trends and attractive investment opportunities. We hope you get some utility out of them too.

Disclaimer: These landscapes are our best representations of complicated sectors and are not perfect (something about the limitations of 8 ½” x 11” in 2D). We need — and encourage — your expert crowd-sourcing to improve both the accuracy and usefulness of the charts. We welcome your feedback (email to LUMAscapes@lumapartners.com) and will incorporate these comments as we evolve the LUMAscapes.

Welcome to the LUMA Partners Website

OK, so it took us 9 months to roll out a website. We were fortunate to have immediate deal flow after launching LUMA Partners in the summer of 2010 and hit the ground running.  But we are here now on the web with a real presence. We are big believers in quality design and are happy with how this project came together. Hopefully you are too. Thanks to our terrific design team at Slice of Lime for a great job!

Companies have blogs; VCs have blogs, but not bankers (note: we think of ourselves as strategic advisors as opposed to transaction bankers). Then again, we take a different approach to many things compared to most bankers and are happy to be the exception. We look forward to posting our thoughts about the ever-evolving digital media industry on this blog.

Thank you for reading.