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23 July 2020

SpotX teases SpringServe acquisition with “strategic investment”

RTL-owned ad platform SpotX has made yet another move to consolidate its reach within ad tech. The company invested in SpringServe, an ad-serving platform for OTT and connected TV. With SpotX already on the front foot, following a string of acquisitions and partnerships over the past 18 months, surely an acquisition is on the cards here, too?

For now, this is being labeled a “strategic investment” to bolster SpringServe’s product, engineering, and R&D tools, but this is no nonchalant display of support. Both companies have something to gain from an acquisition – SpotX would get full autonomy of SpringServe’s ad serving tools, while SpringServe would get some much-needed clout and financial security.

NY-based SpringServe offers a suite of ad serving and management tools which are to support both broadcast and OTT video. The company’s offering includes tools such as inventory routing, customized ad experiences and advanced podding logic.

Although they both work on the supply side of ad tech, they are complementary, rather than competitive. SpotX provides a supply-side platform (SSP) exchange that links video services up to advertisers, as well as programmatic campaign planning services. Meanwhile, SpringServe is an ad server that allows video and CTV companies to manage ad campaigns on their platforms.

In short, SpotX enables ad campaigns by auctioning inventory, while SpringServe provides a ledger to monitor them.

SpotX’s COO, Sean Buckley, said, “SpringServe’s steadfast approach to enabling seamless, effective ad serving for OTT publishers is something we have followed closely, and our investment in the company is a logical next step to build on our existing partnership while also enhancing our capabilities for partners.”

This investment is likely just SpotX having a peep under SpringServe’s bonnet to ensure that both companies are compatible before making more concrete moves.

As for SpringServe, a vote of confidence from a large platform such as SpotX gives it more clout in an incredibly competitive marketplace. SpotX’s programmatic marketplace currently reaches 80% of ad-supported CTV viewers in the US.

With service fees cut completely by many of the major SSPs, independents can often be at a huge disadvantage in terms of pricing. AT&T’s Xandr, Verizon Media, and – as of last month – Amazon Advertising all do not charge SSP fees.

“It’s a tough space. And we’ve clawed our way to this position. We consider the investment from SpotX as a signal to the market that we’re ready for center stage,” SpringServe co-founder and CEO, Joseph Hirsch, told Ad Exchanger.

Hirsch also told Ad Exchanger, “The market is looking for closer alignment between all these pieces in the sell-side ecosystem. There are pressures in the market which encourage consolidation.”

Consolidation is certainly on the agenda. The investment means that customers shared by both companies will be able to use them as a single supply channel for ad serving, inventory management, and programmatic capabilities.

This partnership of sorts also allows certain CTV product updates that only manifest when an SSP and ad server go to market together. For example, SpringServe’s ad pod management – a means of ensuring that competing ads are kept apart – will be more thorough when paired with SpotX’s bidding tech.

The connected TV space has been a core target area for SpotX since its acquisition by RTL in summer 2017. Most connected TV ad inventory today is available in private marketplaces, but various ad tech suppliers are getting their hands-on connected TV programmatic inventory.

SpotX’s Buckley also hinted that there was potential to collaborate on addressable linear ads.

This partnership is just the latest chapter of SpotX’s conquest of ad tech. In January 2019, SpotX acquired UK firm Yospace, a server-side platform that places programmatic ads in on demand content, for $33 million. Yospace is an expert in stitching replacement ads into multi-platform services in a way that it claims replicates original broadcast channels.

Later on last year, SpotX expanded its partnership with enhanced ad vendor Brightline. This expanded SpotX’s premium OTT inventory by onboarding new publisher partners and launched programmatic support for Brightline’s interactive ads.

Another recent win for SpotX came in May this year. Samsung Ads decided to use the platform to make its CTV inventory available programmatically. Previously it was only available through manual insertion order (IO).