Marketecture: Get Smart. Fast.
00:21:31 · Ari Paparo, Eric Franchi, Tim Rowe
[00:21:31] S1: I mean, it makes sense as the same sort of synergy. Go ahead, Eric. [00:21:34] S2: You don't spend $600,000,000 if you're not taking this seriously. You know, index to the to the market. Right? 600,000,000 is on the high end of ad tech acquisitions historically. Right? Like, the sort of kind of ranges 150 to 500, right? So you're indexed to the high end. And then I mean T Mobile is a massive company, right? You know, it's it's a little bit of kind of couch change for them. But still on an absolute basis, this is a lot of money. And I think that there's a real opportunity, in this concept of just redefining out of home perhaps and you know it's about screens, right? It's the screen in your in your pocket, it's the screen outdoors. It's the screen in the in in the back of the car. And that's, I think, ownable for T Mobile. So I'm excited about this. I'm really excited. [00:22:22] S1: What what about the multiple? We don't know what what Vistar's revenue is, but 600 seems like a pretty big number. I don't know. Is this a rich valuation? I mean, there's been so little digital out of home acquisitions. It's kinda hard to say. Tim, any thoughts on that? [00:22:35] S3: I've heard unofficially off the record that the the money that flowed through the platform last year was in the neighborhood of 350,000,000. [00:22:42] S1: So Okay. Gross. [00:22:44] S3: Might be good question for you, Ari, because I know you've you've got great thoughts on how DSPs make money. What do you think of that?
00:22:44 · Tim Rowe, Ari Paparo, Eric Franchi
[00:22:44] S3: Might be good question for you, Ari, because I know you've you've got great thoughts on how DSPs make money. What do you think of that? [00:22:49] S1: I think that ad networks have been selling for one to two of gross. So it's a pretty low multiple on gross, but that's what it is. That would be in this category. They're not an ad network, but it's a comparable. If it's three fifty and they keep 20%, that would make them a 70 net business, probably a little profitable at that level. 600 seems a little rich, not terribly. And Eric, what do you think? You're the professional. [00:23:14] S2: Yeah. No. I'm I'm aligned. If it's mop... So the question is how much are they growing? Right? So if, you know, they have been on a good trajectory from a growth standpoint and again I don't have any knowledge or an investor. It's been some times since I talked to Michael, shout out to him, awesome job. If they're growing, know you assign a premium to that. If there was a lot of interest in the company, right, you can assign a premium to to that as a as a buyer. Again, don't don't know. So I think I think you can rationalize this as, you know, high end of a ad net multiple, high end of a DSP multiple, assuming there's profitability and growth.
00:23:14 · Eric Franchi, Ari Paparo
[00:23:14] S2: Yeah. No. I'm I'm aligned. If it's mop... So the question is how much are they growing? Right? So if, you know, they have been on a good trajectory from a growth standpoint and again I don't have any knowledge or an investor. It's been some times since I talked to Michael, shout out to him, awesome job. If they're growing, know you assign a premium to that. If there was a lot of interest in the company, right, you can assign a premium to to that as a as a buyer. Again, don't don't know. So I think I think you can rationalize this as, you know, high end of a ad net multiple, high end of a DSP multiple, assuming there's profitability and growth. [00:23:50] S1: Yeah. The one thing I will say is they were been looking for an exit for a long time. I've heard rumors for years about, like, them getting to the church and then not getting married a couple times. But I don't know any of the details. I just I just have heard that. Well, congratulations to Michael and the whole team. This is a great deal. M and A is back, baby. And I think we're gonna talk about that. So we're gonna come back with the news of the week. We have more M and A with Trade Desk and mParticle and others, a lot of, retail media, and, and some other good stuff. Google maybe starting to show some cracks, so, we'll be back. [00:24:28] S2: Alright.
00:24:28 · Eric Franchi, S0, Ari Paparo
[00:24:28] S2: Alright. [00:24:29] S0: This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed Sponsored Jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed Sponsored Jobs. Get a $75 sponsored job credit at indeed.com/podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed sponsored jobs. [00:24:59] S2: And we're back. As Ari said, it's a big week for M and A. You may not like it, but this is what peak performance looks like, ladies and gentlemen. Huge M and A week. We had just our media on Monday. On Wednesday, The Trade Desk announced the acquisition of the metadata startup, Sincera. Sincera was a investment of ours at the fund. Sincera, I believe Ari, [00:25:25] S1: you were a principal investor too as well as adviser and I helped them with their marketing. I'm like really into this company. [00:25:31] S2: They were the 2023 Marketecture startup of the year. We know how to pick them. [00:25:37] S1: Absolutely.
00:25:37 · Ari Paparo, Eric Franchi
[00:25:37] S1: Absolutely. [00:25:38] S2: And what an awesome deal. Okay, couple things to talk about this. So for those who don't know Sincera, Sincera is a metadata startup. They have all sorts of interesting data that they observe, which are is then utilized by ad tech companies to either inform their data or build products. Sincera's data was used by TTD last year in a lot of different ways, but I think most notably to build the SP 500 plus. They had a deal with IAS and they were the data behind their MFA product, their quality attention product. Like it's an awesome company. And I think it was a very strategic acquisition for TTD just given where they're going from a quality perspective. And then could not be a better team to pick up for for TTD. This is only the second acquisition TTD has ever done. There was a third rumor acquisition that was an acquihire that apparently is like, you know, buried so far that we'll never see it. So TT has not been very acquisitive. So it would be interesting to talk about, like, does this signal a change for TTD, or is this just, like, so squarely, like, we have to own this thing that, you know, be business as usual? [00:26:49] S1: Yeah. This is my... I have a lot of hot [00:26:51] S2: takes here.
00:26:51 · Eric Franchi, Ari Paparo, Tim Rowe
[00:26:51] S2: takes here. [00:26:51] S1: So, you know, you know, the famously Amazon says, you know, your margin is our opportunity, and The Trade Desk is your ad tech tax is our opportunity. So in the past eighteen months, they have been attacking the SSPs with OpenPath by... And slowly taking that margin for themselves, you know, reducing the total take rate while increasing their volume. This move is a absolute death blow to IAS and DoubleVerify. IAS and DoubleVerify have very crude ways of measuring the web, the idea of brand safety based on keywords, the idea of MFA. The ways they do these things are just not very intelligent. They're... And not only are they not intelligent, but they're hard bundled. So the customer just gets a true false signal or maybe a percentage signal. They don't have any control. The Trade Desk is buying the only... The world's best and only map of the Internet, the open Internet. They have every single detail about how the ad stack works, and they can make that into products that do MFA, brand safety, viewability, everything else, just vastly better than the existing incumbents who have multiple billions of dollars of market cap. And they're going to do that. It's gonna be better and cheaper and integrated, and, you know, watch out. [00:28:08] S3: Mic drop. [00:28:13] S2: Tim? Got down for time. Please, Tim, take the mic. [00:28:18] S3: I don't know if there is anything I can add other than Ari has spoken. [00:28:22] S1: I'll put it in my newsletter on Monday.