Peter Kafka

Recent Posts by Peter Kafka

Simulmedia’s Investors Bet $25 Million More on Smart TV Ads (Video)

Dave Morgan’s pitch is simple, and counterintuitive: There’s going to be a boom in video ads — and it’s going to happen on TV.

The Simulmedia CEO doesn’t mean that the TV Industrial Complex is going away (you would miss it if it did).

Instead, he predicts, advertisers and programmers are going to get savvier about the way TV ads work, and will start using the same data and mechanics that power Web ads.

And since TV ads are going to be a much bigger business than Web video ads, for quite some time, he wants his company to be in the middle of that.

Morgan has been making some version of this pitch for several years now, and he admits that the future isn’t here quite yet. But investors keep betting on the thesis, and on him. Simulmedia has just closed a $25 million round, led by Valiant Capital and R&R Ventures, bringing its total raised in five years to $58 million.

Until now, Simulmedia has been making money by buying leftover airtime from programmers and pay-TV providers, adding in a dollop of data about who’s actually watching the stuff, and reselling it to advertisers. Now it wants to use some of the new funding to build out a platform so other people can use it to do the same thing.

Morgan’s idea is that networks may want to apply advanced analytics to their prime ad inventory, but won’t want outsiders like Simulmedia inserting themselves as middlemen. So he’ll sell them the tech, instead. You can hear him explain his plan in his own words at the bottom of this post.

But one quick detour first. I don’t usually spend time talking about the people behind the money in funding stories, but I’ll make a brief exception here, because they’re interesting.

So: Valiant is a hedge fund run by Chris Hansen, which normally makes big bets in late-stage Web companies like Facebook, Dropbox, Pinterest and Uber; you may also have heard of Hansen because he’s the guy who nearly bought the Sacramento Kings and moved them to Seattle earlier this year. Hansen used to be an analyst at Montgomery/Banc of America, the bank that almost took Real Media, Morgan’s first company, public, back in the first boom.

And R&R Ventures is a new fund run by former Time Warner CEO Dick Parsons and media investor Ron Lauder. Earlier investors including Time Warner, Avalon Ventures, Union Square Ventures and Allen & Co. are all back in this round, as well.



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