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Altice touts telecom-advertising ‘convergence’ with Teads buy

Altice, the European telecom giant, has entered the US market and is now looking to expand its advertising business. The company announced this week it’ll acquire Teads, the fast-growing digital video advertising firm that has wowed the publishing world.

The news is the latest in a buying spree for Altice: it acquired a majority stake in US telco Suddenlink in 2015 and acquired cableco provider Cablevision in 2016. And like many other pay TV providers in the States, the company is now looking for new ways to monetize its expanding broadband footprint.

It’s the latest in a string of ad tech acquisitions pursued by pay TV providers amid steady subscriber erosion. Late last year, AT&T announced it – along with Dish Network and WPP – was acquiring addressable TV tech provider Invidi; in the past two years, Verizon acquired AOL and Yahoo – two huge digital advertising players; Comcast bought FreeWheel back in 2014, and last year, it acquired StickyAds, an online advertising firm. There are other telecom firms making similar moves around the world: Norway-based telco Telenor acquired Tapad last year, and Singtel just recently acquired Turn.

“Convergence of telecoms content, and advertising is at the core of our business,” said Michael Combes, CEO of Altice. “There is significant incremental value to be generated from our assets.”

Teads, which was founded in 2011, is the “outstream” video ad pioneer. The company devised a way to insert video ads – which are considered the most effective ad format – into text Webpages, meaning the ads are outside or “outstream” of a video player. These ads are considered “native” video adverts that sit typically within premium editorial content and therefore command higher rates for publishers, but perhaps the best value to publishers and marketers alike is that Teads ads only play when the ad is visible – giving its ads high viewability marks.

The online publishing world has warmly embraced Teads as a way to cash in on the video ad revenue without needing to create video content to run the ads against. Teads claims to have an audience of more than 1.2 billion unique visitors, including some 720 million users reached via mobile. The ad tech company’s revenue grew 44% in 2016 to reach $203 million. Altice is acquiring the firm for $322 million.

Late last year, Teads announced a partnership with Time Inc that brought its outstream ads to expand Time’s premium inventory. Teads counts The Washington Post, The Atlantic, Forbes, Bonnier, Mashable, Slate, The Guardian, The Telegraph and Nikkei among its top publishing partners.

Altice described the ad tech firm as “the No. 1 online video advertising marketplace” in the world. By opening up text content to video ads, it’s “changing the game within the video advertising market by creating unprecedented levels of premium inventory, which did not exist before,” the company said in a statement.

Altice has over 50 million subscribers globally across its many businesses. Last year, Altice’s international advertising revenue figures surpassed $750 million. Altice is hoping to marry its large subscriber footprint – and the first party data that it generates from that large footprint – with its advertising business. By acquiring Teads, Altice will be able to deliver targeted advertising across screens to marketing partners within both its content and pay TV businesses.

“Teads will enable us to offer a truly unique value proposition to brands and agencies on the one hand and the media industry, programmers and distributors on the other,” Combes said. “It is that value proposition — data-driven, measurable and multi-screen — which will enable us to significantly grow our advertising business.”

From our point of view this does not help in the slow transition from linear TV advertising selected based on what is playing, to programmatic, selected based on who is listening, and does not appear strategic to us for Altice.

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