Wednesday, November 12, 2014, 8:54 AM ET|Posted by Will Richmond
Late yesterday Yahoo announced it's acquiring video ad platform BrightRoll for $640 million cash. The deal had been rumored for a while and is the latest in a consolidation trend in the video ad tech space (and larger online video space) over the past year. By my count, since the start of 2014, there have been over 20 different online video acquisitions in the U.S. alone, spanning ad tech, content creation, distribution, search/discovery and mobile.
The BrightRoll deal instantly makes Yahoo one of the leading players in programmatic video advertising, a significant growth area in the industry. Yahoo joins other big media companies that have also entered the programmatic video ad space via acquisition (e.g. Facebook with LiveRail, AOL with Adap.tv, RTL Group with SpotXchange, etc.). With all of these companies now emphasizing programmatic, growth will surely accelerate further.
For Yahoo in particular, the deal follows through on CEO Marissa Mayer's longstanding vision to have video be one of the company's growth pillars. To date though, Yahoo's video strategy has felt somewhat unfocused, highlighted mainly by marquee content initiatives (e.g. SNL clips, Katie Couric, live music concerts, etc.), and mobile (via Yahoo Screen), but has lacked any material monetization play.
BrightRoll certainly changes that as it brings a major video ad footprint to Yahoo (as well as a reported $100 million plus in 2014 revenues). BrightRoll says it works with 87 of AdAge's top 100 U.S. advertisers, all 15 top ad agencies and all 10 demand side platforms. If BrightRoll is successfully integrated with Yahoo, the combined company will have a lot of upside, particularly in mobile.