When one company acquires or merges with another, one of the goals is to improve its current product line while seamlessly integrating the solutions from the new organization. In the case of AdSupply, which is acquiring Adaptive Medias, the fit seems to be perfect.
Adaptive Medias Merging With AdSupply
AdSupply provides an online and mobile private digital advertising marketplace for brands and agencies to buy high engagement advertising across quality sites and apps using its proprietary technology for off page, display and video advertising. Adaptive Medias, addresses similar needs by providing mobile video delivery and monetization solutions for publishers, content producers and advertisers across all screens and devices.
With this all-cash aquisition, AdSupply will pay $35 million or $1.5 per share, which is a premium of close to 900 percent of Adaptive Medias’ closing stock price of $0.16 on January 27, 2016. According to John B. Strong, Chairman and Chief Executive Officer of Adaptive Medias, there were many positives for this acquisition, including the “Clear recognition to Adaptive Medias’ upside potential.”
In an exclusive interview with Small Business Trends, Justin Bunnell, CEO of AdSupply highlighted the importance of video to benefit small businesses, combat ad blocking and more. As video continues to be the preferred mode of communication for consumers and organizations alike, Bunnell talked about the value of video as a communications tool for everyone online, but especially small businesses.
He said, video represents an opportunity for small business by taking advantage of the anxiety and reluctance large brands have in trusting “the ‘safety’ of user generated video on sites like Facebook.” He went on to say, small businesses can compete because they no longer have to rely on print, television and display digital to reach their audience.
The Adaptive Medias solution is designed to simplify the delivery of video with technology that can be easily learned. Bunnell said the Adaptive Medias Graph platform can be used to deploy video content businesses create, or small businesses can choose from the company’s large video repository and embed any of these on their sites.
One of the benefits of acquiring Adaptive Medias is, AdSupply will not have to spend another two or more years in developing Media Graph. This is a similar technology currently being used by the biggest video sites, including YouTube and Vimeo. Bunnell said the Media Graph technology has all the same features as everyone else, as well as “tools for publishers to monetize video content on their own site and traffic, a capability these other companies lack.”
Media Graph is a comprehensive mobile video technology platform designed to facilitate the delivery of integrated, engaging video content and impactful ad units across all screens and devices. This is one of the first solutions to offer clients a digital video player built specifically for the mobile world.
Another plus with this merger is, the ad block technology AdSupply has created will be available to more customers as Media Graph integrates the solution in its platform.
Since both companies target advertising, the newly launched and patented BlockIQ technology from AdSupply will play a great role here. One of the biggest problems facing online advertisers is ad blockers, which stop ads from reaching the end users. While this might be beneficial to the user, for the company paying for the advertising it is a loss.
This loss totaled $22 billion in lost revenue in 2015, and according to the 2015 Ad Blocker report by Adobe Systems, the use of ad blockers in the U.S. alone is increasing at 48 percent annually. The thought of almost one in two ads being blocked is bad news for any company, for small businesses with limited marketing budgets, it is even worse.
In addition to stopping ad blockers, Bunnell said traffic fraud in video advertising is a big problem, which according to him results in losses totaling $4.6 billion annually. To address this problem, he said, “With our BlockIQ Adblock Bypass, we are able to guarantee our advertisers 100 percent human traffic which in turn gives us a huge advantage against our competition.”
Ad blockers prevent advertising from being displayed on websites by removing elements from the website HTML and blocking connections to other servers. The technology AdSupply has developed overcomes this obstacle by offering publishers and advertisers several options as to how they choose to implement the solution.
- The first one is the friendly approach. A welcome message explains the damage ad blocking causes to the websites and communities that offer free service in return for ad dollars.
- The second approach kicks it up a notch by protecting the publisher’s content behind the BlockIQ Passwall system and refusing to serve content until the user puts the site on the allowed list on the ad blocker.
- The third option goes a step further. It defeats ad blocking and delivers the ads to the visitor by using the patented BlockIQ BlockBypass system.
There is an unspoken understanding between users and website operators, which basically says you get free content in return for ads. However, ad block technology violates that agreement and makes it hard for site operators to make money. This is a battle that is sure to continue on as each side develops technologies to counter the latest development of the other.
With Adaptive Medias merging with AdSupply, comprehensive digital advertising for publishers, content producers and advertisers will all be under one umbrella with innovative technology that will ensure content will have a higher delivery rate.
The impact video is having will also continue to grow, and as it applies to small businesses Bunnell said in the conclusion of the interview explaining:
“Small businesses should not look towards television commercials as the model for their video advertising. Instead they should look at how their friends and family use video to communicate and come up with creative ways to spin that into a marketing message for their product or service.”
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And so the ad-blocking wars continue…
This is a very real concern for online businesses, both publishers and advertisers because it affects the primary revenue stream for many sites. We’re going to see more companies doing this.
This is definitely a battle with no end in site, which as you said is a very real concern for online businesses.