Yesterday, BBE, one of the earliest online video ad networks, announced it has been acquired by Specific Media, a large display ad network. I caught up with BBE's CEO and founder Matt Wasserlauf to learn more about the deal. An edited transcript follows.
VideoNuze: Why did you decide to be acquired now?
Matt Wasserlauf: The market needs some consolidation, there are a lot of companies trying to do similar things and most important customers need a one-stop solution. They need to be able to buy reach against all display - banners, rich media and video.
VideoNuze: Why Specific Media?
MW: They're the leader in targeting and that's where video is going next. We've done a great job delivering reach and brand metrics, but many of our customers are getting savvier about video and are looking to reach specific audiences. The targeting that Specific Media brings to BBE is going to create the leader in video targeting.
VideoNuze: Say more about what you think the companies can achieve together that they couldn't separately?
MW: Specific Media is the leader in display and BBE is in video. We bring those products together in one solution and for big marketers that want that we think we're in a place that very few others can position themselves.
VideoNuze: BBE was one of the earliest online video ad networks - what's changed in the market since you started?
MW: A lot. We can say we're still early in the game in online video, and that's fair because it's going to run a long course, but we are far enough along that the market's gotten very busy and very competitive. I'm concerned about some of the ways that some companies are reselling a lot of the same inventory and it hasn't necessarily produced great results. We need to drive the value of the offering, which is better content, which can further lift the market. Consolidation like this can help get us there.
VideoNuze: What's your role in the combined company?
MW: EVP of Video, leading the combined video efforts of the company.
VideoNuze: Can you talk about what you see as the big catalysts that are going to drive online video advertising from here?
MW: I liken online video to where cable was in its early days, with lots of channels. So as the ad market continues to grow there will be more programming and the production values will increase. Marketers are going to have a large say in that, much like they did in the early days of television. So content will accelerate and we'll see a lot more viewers in turn.
VideoNuze: And the key challenges in vide advertising?
MW: The main challenge is delivering on a value proposition. Brands and marketers are getting savvier and so we need to be representing the opportunity well and there's still a lot of education to be done. And we need to be delivering performance. I see these as the steps towards getting major marketers comfortable. Television has done it for a long time; they've been able to come together on what are the common metrics and what is great performance and when marketers get comfortable with that they accelerate their spending. so we have to deliver the promise. We need to spell out our value and really deliver on it.
VideoNuze: There's been a huge amount of money invested in online video ad networks. Is there a shakeout coming?
MW: I'd call it "consolidation" and I think it will be healthy for the market. When you have a hotly competitive market like ours sometimes you see unhealthy practices, like taking loss leadership type deals or buying inventory - things that don't necessarily create value. In a lot of ways some of the integrity has been lacking. For example, there's been a lot of confusion when first-time buyers are being sold on a certain thing and then they're being delivered another. So I see consolidation as a healthy next step.
VideoNuze: Any final thoughts?
MW: I'm excited about our opportunities and it's going to get a lot more exciting in the very near future. The combined company, with a bigger presence, lets us really take on these challenges.
VideoNuze is the authoritative online source for original analysis and news aggregation focused on the burgeoning online video industry. Founded in 2007 by Will Richmond, a 20-year veteran of the broadband, cable TV, content and technology industries, VideoNuze is read by executive-level decision-makers who need to get beyond the standard headlines and achieve a deep understanding of online video’s disruptive impact.