Tremor-Scanscout Merger Creates Web Video Ad Player on Par With Hulu's
Wave of Consolidation in Space Driven by Advertiser Demands for Reach — NEW YORK (AdAge.com) — Lots of advertisers want to buy online video — they just don't want to buy it in dribs and drabs from a bunch of different places.
Context & Ripple Effects
The Tremor-Scanscout merger is the payoff to a three-year arc. In 2007, the space was so fragmented that coverage framed it as every startup having a different solution to video ads, and that fall YuMe and Blinkx were still the newcomers making their first splash. Tremor then spent its $18 million 2009 funding round building network scale — and this week converted that scale into a combination positioned on par with Hulu's video ad operation.
What changed today is not technology but packaging: AdAge reports advertisers want to buy online video at broadcast-like reach rather than piecemeal across dozens of networks, and the merged entity is the direct answer. That framing puts scale, not ad format innovation, at the center of competition.
First-order effects
- Advertisers gain a single source for web video inventory with reach comparable to Hulu's, reducing the number of insertion points they must negotiate across.
- Scaled rivals such as YuMe and Blinkx now compete against a combined player whose core pitch — aggregated reach — is exactly what their own sales teams have been selling.
Second-order effects
- Mid-tier video ad networks without comparable scale face pressure to merge or be acquired, since advertisers consolidating budgets into larger packages leave small networks selling the dribs and drabs buyers no longer want.
- Content publishers distributing through these networks see bargaining power shift toward whoever aggregates the most inventory, tightening revenue-share economics for smaller syndication partners.
Third-order effects
- If advertiser demand for one-stop reach keeps driving dealmaking, the long tail of specialist video ad startups gives way to a handful of large aggregators — a structural echo of how display ads concentrated around fewer, bigger networks.
- A market organized around scaled reach also sets up the eventual public-market test for these companies, as investors look for which consolidator can convert aggregate inventory into durable margins.
The trend: Online video advertising is consolidating from a field of format-differentiated startups into scaled aggregators that sell TV-style reach in single buys.