AllThingsD » Dave Morgan

Simulmedia Raises $6 Million More for Web-Like TV Ads

Peter Kafka — Mon, 30 Apr 2012 16:26:46 +0000

Web ad pioneer Dave Morgan has rounded up more money for his move into TV: His Simulmedia has closed a $6 million funding round from previous investors Avalon Ventures, Union Square Ventures and Time Warner’s investment arm.

That brings Simulmedia’s total raise to some $27 million over three years. That money is going into Morgan’s take on “targeted” TV advertising, which promises to merge Web-style targeting with traditional TV ads.

There are lots of people chasing targeted TV ads, and to date none of them have gotten very far. Canoe Ventures, a consortium led by Comcast, Time Warner Cable and the rest of the cable industry, just imploded earlier this year.

The TV guys will probably get there, someday. But in the meantime, Morgan is trying a slightly less ambitious version that he says can work now.

Rather than trying to deliver customized ads to every TV viewer based on their individual set-top-box data, Simulmedia uses some set-top-box data (which it gets from providers like DirecTV, TiVo and AT&T) to try to find undervalued ad inventory. So, in theory, it can help an advertiser find a cheaper way to get in front of a specific audience it wants to reach.

If that sounds a bit like Web advertising, that makes sense. Morgan built two pioneering Internet ad companies — 24/7 Real Media and Tacoda, which were acquired by WPP and AOL — before tackling TV.

Simulmedia says it has run 200 campaigns for 24 brands since it pivoted to its current model (it had originally tried using the same technology to target TV advertising for TV programming), and Morgan says he is “very close to profitability.” This is the second time Morgan has funded the company with an inside round: The same group of investors put in about $9 million a year ago.

Web Ad Pioneer Dave Morgan Adapts Simulmedia To TV's Reality

Peter Kafka — Tue, 17 May 2011 14:57:20 +0000

The TV networks are spending the week telling advertisers to keep buying TV ads.

Great idea, says Dave Morgan.

If you pay attention to Web advertising but haven’t kept track of Morgan recently, his position might strike you as a bit odd, coming from a well-known Web entrepreneur who built and sold two big digital ad companies.

But Simulmedia, Morgan’s newest effort, has nothing to do with Web ads. Instead he’s helping TV advertisers buy the same TV ads they’ve always bought. He just says he can help them spend their money efficiently, using data from cable companies’ set-top boxes.

Simulmedia has been working on this for a couple of years, and originally focused on a relatively narrow slice of the TV ad market: TV networks advertising their own shows on other networks. But earlier this year the company changed strategies–you can go ahead and call it a pivot without being embarrassed–and is now targeting the entire $70 billion TV ad market.

Morgan raised another $10 million last week–an inside round from previous investors including Avalon Ventures, Union Square Ventures and Time Warner–which brings the company’s total funding to more than $20 million.

That’s a good reason to ask him to provide an update on his business, which he does in the video interview below. I’m particularly struck by the comments Morgan makes about adapting a go-go Web start-up mentality to accommodate the TV industry’s deliberate pace.

“I had some assumptions that there were things that had not happened in television because people didn’t understand the changes, and they were Luddites and didn’t want to change,” he says. ”The closer I’ve gotten into the marketplace, I realize they absolutely know what’s going on–they’ve made very calculated decisions.”

[ See post to watch video ]

The New York Times, Brought to You–Literally–by Twitter

Peter Kafka — Mon, 21 Sep 2009 21:51:54 +0000

It has been easy enough to be skeptical about Twitter’s influence and staying power–I do it all the time. But there’s no denying that Twitter has become a powerful driver of Web traffic.

Just ask the New York Times (NYT), which says Twitter is about to become one of the top 10 referral sources to the paper’s site.

Impressive. But what exactly does this mean?

There was a flurry of excitement this afternoon on Twitter–of course–when Simulmedia CEO Dave Morgan threw out a much more exciting data point: Reporting/Tweeting from an industry conference, Morgan said Times digital boss Martin Nisenholtz had announced that “Twitter now drives 10% of NYT digital distribution, up from 0 a year ago.”

Other attendees report hearing the same thing. But whether they were participating in a mass hallucination or Nisenholtz misspoke, here’s the Times’s official line, via spokeswoman Diane McNulty: “At its current growth rate, Twitter is, or will soon move into, the top 10 in terms of referrals to NYTimes.com.”

If that’s the case, then Twitter likely accounts for much less than 10 percent of the Times’s traffic. If you assume that Google (GOOG) is the paper’s largest external referral source and that it likely accounts for a third of the site’s traffic (these are semi-educated guesses, but I’m happy to adjust), then Twitter and other sources at the bottom of the top 10 are going to be in the low single digits.

Still! It is a lot of traffic, and a year ago it either didn’t exist or someone else was directing it to the Times. Now the trick for Twitter (and its investors) is to figure out a way to capitalize on this phenomenon.

Congress Readies an "Opt-In" Privacy Bill, and the Web Industry Cringes

Peter Kafka — Tue, 23 Jun 2009 20:41:30 +0000

Here comes the battle the online ad business has been dreading: Congress is drawing up a bill that would require users to sign up to let advertisers track their online behavior–and, if you believe online publishers, more or less destroy the online ad business.

Simulmedia founder and CEO Dave Morgan told an industry conference today that Rep. Rick Boucher, the Virginia Democrat who has become the loudest voice in Congress in the advertising/privacy fight, is prepping a bill that will force publishers to let Web surfers “opt in” before they’re served with any third-party tracking cookies.

Not a huge surprise: Boucher laid out the case for the bill last week at a Congressional hearing. It’s unclear just exactly what that would mean for the business: Could Google (GOOG) not send cookies out if you, say, played a YouTube video embedded on a third-party site (like the one the White House runs)?

But right now the details of the proposed bill don’t matter: The industry has already started arguing against it via promotions that explain just how valuable Web advertising is to the country (and by extension, the targeting/tracking that cookies enable it). From MediaFlect’s Dorian Benkoil:

“Congress’ position is that consumers are not appropriately aware of what is being done on their machines, and the use of cookies delivered by a third party is something consumers have not been appropriately informed of,” said Morgan, who oversees privacy initiatives for the Internet Advertising Bureau [and who] was in Washington last week talking to FTC officials and congressional staff, he said. “Congress’ default position is that that will require an opt-in,” to serve a third-party cookie.

That’s a perfectly sensible position from a consumer’s perspective: Why should advertisers and their proxies track what you’re doing on the Web without your consent? But from the advertising/publisher perspective, an opt-in plan means a plan no one will ever agree to, which means no more cookies/tracking, period, which means Web advertising becomes as imprecise and clumsy as good-old TV and print ads.

Which is why the Web guys prefer a bill that allows surfers to opt out–or preferably, no bill at all.

I still like my Solomon-like solution, which I’ve thrown out before: Let consumers opt in, but give them a reward for doing so.

It doesn’t have to be much–consumers say they care about privacy, but in reality, they’re very happy to trade personal info for trinkets and geegaws. Maybe you get “privacy points” every time you visit a site for the first time and sign away your right to complain about tracking. And if you earn enough you get a bag of Cheetos, etc. Sure we can work something out.

[Image credit: rpongsaj]

A Web Ad Guy's Third Act: Better TV Ads for TV Shows

Peter Kafka — Fri, 06 Mar 2009 11:00:34 +0000

Dave Morgan made his reputation, and fortune, by building RealMedia and Tacoda–two pioneering Web advertising technology companies. So it’s no surprise to see him launch another ad start-up.

But this time, Morgan has abandoned the Web for TV.

And Morgan’s Simulmedia, which just announced a $4 million funding round led by Union Square Ventures and Avalon Ventures, isn’t even going after the TV of the future.

Instead, it’s chasing an odd niche that exists today: television commercials for television shows–e.g., the ads NBC runs during “The Office” to try to get you to watch “30 Rock.”

Morgan says this is a $10 billion business, and argues that most of the money spent on it is wasted. He says his company can solve that with software that swaps

This sounds similar to lots of other efforts to make TV advertising more Web-like by serving up different ads to different viewers based on who they are and what they watch. Basically, a variant of the behavioral targeting technology that made Tacoda worth $275 million to Time Warner’s (TWX) AOL, which bought the Morgan’s company in 2007.

But Morgan, who spent less than five months at AOL as an EVP before bolting, says his start-up is chasing a different market, using different techniques. He explains why in this interview:

[ See post to watch video ]

Can Yahoo Stop AOL's Talent Pool From Leaking So Much?

Kara Swisher — Thu, 10 Apr 2008 09:09:46 +0000

Gone, Tim Tuttle of Truveo. Gone, the Birches of Bebo. Gone, Dave Morgan of Tacoda. Gone, many Quigos.

One of the more interesting little problems that AOL has had over the last few years, in regards to its acquisition of hot Internet companies, has been that it is situated deep in the bowels of the Time Warner (TWX) behemoth.

So, one wonders, will a possible hook-up with Yahoo (YHOO) change that, giving the also-ran Internet outfit potentially valuable stock in Yahoo to better entice valued employees to stay?

AOL has to hope so, especially since it has had an especially hard time loading up new employees it absorbs from acquisitions. This talent pool typically comes from a start-up culture, and they are used to big slugs of stock, with an attractive package of options in order to entice them to stay.

While all Web companies struggle with the hippity-hopping nature of employees, AOL has suffered more than most, sometimes due to its circumstances, sometimes due to its own efforts.

For example, with Time Warner stock staying in a permanent state of stasis over the years and a reluctance to reload too many new employees without generating the ire of old ones, except for the most desired talent, it is harder to keep anyone at AOL for long.

And that’s without the fact that AOL is not exactly the dream job for ambitious entrepreneurs.

For example, one of the stars AOL has lavishly pointed to as an example of how innovative it can be, Tim Tuttle, the CEO of its deservedly lauded video search engine Truveo, recently left to pursue other projects.

According to an AOL spokesperson, Tuttle will remain a consultant, passing day-to-day management to Pete Kocks. That also happened with Dave Morgan of Tacoda.

And AOL’s generous acceleration of vesting when it acquires other companies also often results in brain drain.

Case in point, two of its biggest accquisitions, Bebo and Quigo, in which the options ALL employees had in the companies were fully accelerated upon completion of the deals.

“I was amazed that they insisted on it,” said one person familiar with the Quigo deal, in which AOL paid $300 million for the online advertising company (news of which we broke here last fall). “It seemed designed to give everyone an escape hatch.”

And, indeed, many key Quigo employees have left since the deal was struck, which might have been the point.

It will be interesting to see what happens at Bebo too, where some have been given generous retention packages, but all have gotten their stock options accelerated.

AOL paid $850 million in cash for the third-place social-networking site recently. The two founders of Bebo–Michael and Xochi Birch–grabbed their large payday and were gone, baby, gone.

A Yahoo deal could certainly help the situation, by making AOL–whose assets would presumably be shoved into Yahoo–into a real live Internet company again and give its employees a true ownership stake.

AOL+Bebo=More Rich Web Entrepreneurs!

Kara Swisher — Fri, 14 Mar 2008 10:01:21 +0000

After its AOL division paid out an insane $850 million for social-networking site Bebo yesterday, one had to wonder if the true digital legacy of Time Warner (TWX) will be as the perpetual gravy train for legions of Web players.

It certainly seems that way, from the original AOL execs who “merged” their company with Time Warner in 2000 and cashed out at the peak right after the deal to the series of ad-networking start-up entrepreneurs who got acquired, took their payouts and skedaddled right on through to the two founders of Bebo–Michael and Xochi Birch–who didn’t even stay long enough for a latte after grabbing their chunk of the payday Time Warner was handing out in crisp bank notes for the social-networking site they founded.

And, more importantly, after one digital misstep after the next dating back to its Pathfinder days–which I have likened to watching someone fall down an endless staircase–one also has to wonder if Time Warner will ever see any of the upside of the Internet itself.

I remain dubious.

And after interviewing numerous sources close to the company yesterday after the Bebo deal was announced, I am even more certain of more trouble ahead.

Here’s why:

1. While I have always admired Bebo for its innovation and cool ideas about content (I love its “KateModern” online series, as you can see here), AOL essentially just forked over all that money for an audience of primarily teenagers in England, which is Bebo’s biggest market by far (but where Facebook has pulled to No. 1 in a year).

And while Bebo execs would argue with me about this, especially since international aspirations were touted by AOL yesterday, it has no more international traction than much more powerful leaders Facebook and MySpace. More significantly, its size in the important U.S. market, which is hoped will be helped by a marketing boost from AOL, is small and further traction remains questionable.

To be fair, AOL also touted the high engagement levels, which Bebo does have in terms of both minutes and page view per user.

2. Sources close to the company say AOL CEO Randy Falco and President Ron Grant–who are none-too-lovingly called Burns and Smithers at AOL–kept the deal a relative secret from most other execs, including those who might be majorly impacted.

It is not abnormal for acquisitions to be done in a tight group, but was apparently excessive in this case, and reminds one of the sneakiness of former Time Warner CEO Jerry Levin in the troubled AOL merger.

3. Sources said Falco had repeatedly told execs at AOL that he had to do a “big property” acquisition to move the needle, which has not been exactly moving at the unit of late, in order to show Wall Street that AOL had a social-networking strategy. “It’s like constantly scrambling eggs, by doing big new moves, you can hide the problems,” said one exec.

4. The turmoil in its online advertising unit, dubbed Platform A back in the fall, is real and profound and extraordinarily troublesome, given that it is supposed to be the engine to make the Bebo financial projections work at AOL. As I wrote earlier, Bebo needs that jump-start given its small revenues and profits.

The recent departure of three of the key executives who were supposed to be part of Platform A’s success–VP of Marketing Solutions Kathy Kayse and EVP for Global Advertising Strategy Dave Morgan in February, as well as Platform A President Curt Viebranz last week–is worrisome, even though it has been floated by AOL as a housecleaning.

But, curiously, all get good marks for competence from many and had, in fact, been recently touted as saviors by AOL. They do share one thing in common, said several sources: Run-ins with Grant, over cuts in spending and disagreement over aggressive sales projections in a recessionary economy.

In addition, all the key execs from its Tacoda acquisition are gone, along with those from its Quigo buy.

And, while its Advertising.com top exec Lynda Clarizio has taken over Platform A and is considered a strong exec and a “go-getter,” many sources told me she also reportedly had similar testy run-ins with Grant, before he recently was quoted on her promotion: “There is no one better qualified to do this than Lynda, whose track record at Advertising.com has been nothing short of stellar.”

While corporate departures and infighting are also common at many companies, especially over budgets and performance expectations, the level of rancor at AOL has been high.

5. Perhaps most importantly, it remains a mystery to me and many others I talked to yesterday that AOL has not truly attempted to take its very powerful properties like AIM and ICQ and make them more social, building applications on top of already robust ones and partnering around the Web.

“Didn’t AOL invent the social graph with Buddy Lists?” said one perplexed Silicon Valley luminary to me. Yes, indeedy, it did.

Thus, I am still trying to figure out why AOL–which was built on the pillars of community, communications and connectivity–has consistently not been able to leverage its still-valuable assets.

I suppose it is sexier to do a big, splashy deal, of course, which takes focus away–for a while at least–of the essential need to take hits, while doing the slow block-and-tackle work it will require to really build a strong ad and social network.

Buying Bebo, the third-ranked social network, for so much and trying to turbocharge it is a very lofty goal, of course, but the real problem with the acquisition is that it feels like an answer in search of a question.

While Bebo President Joanna Shields–who will enter the AOL exec team as part of the deal–and the Birches have clearly built a very interesting property, the weight of Falco’s calling it a “game-changer” on which AOL’s future rides could turn out to be much too much for Bebo to carry.

That is, especially with that heavy bag of Time Warner cash it is also shouldering.

AOL: Yadda, Yadda, Yedda?

Kara Swisher — Mon, 12 Nov 2007 07:04:48 +0000

In an interesting move, AOL made its second acquisition in a week by buying Yedda, an Israeli question-and-answer service with social elements.

The price for the start-up, founded in 2006, was not disclosed, although it recently raised $2.5 million. Last week, AOL confirmed it has bought the Quigo ad network at a price tag of upward of $300 million, a development we first reported in BoomTown.

The site automatically matches questions to related ones and topics and also to a wider pool of “expert” users. There have been a lot of sites in the genre, and Yahoo has had a genuine success with its own Answers product too, so it is a good arena for AOL to try to differentiate itself in.

I spent a lot of time at the Monaco Media Forum talking to Dave Morgan, newly installed as AOL’s EVP of Global Advertising Strategy. The former CEO of Tacoda, the behavioral ad network that AOL also snapped up, was bullish on AOL’s new prospects now that Time Warner has given Jeff Bewkes the nod as CEO.

We’ll see about that, of course, but it is nice to see the typically moribund AOL showing some signs of competitive energy.

(If you want to see Morgan in action, here below is a video interview Rafat Ali of paidContent did with him this week.)