Spot Runner Takes Shot At Web-Enabled TV Ad Buying
Startup Will Face Competition from Google and Microsoft
By Todd Spangler -- Multichannel News, 11/19/2009 12:01:00 AM
Spot Runner -- a startup that has raised more than $120 million from investors including CBS, Interpublic Group, WPP Group and Grupo Televisa -- is taking the wraps off its Malibu Web-based ad-buying platform, designed to streamline the process of buying and selling TV advertising.
For now, however, it isn't announcing any customers that are planning to use it, and industry analysts note that a significant challenge for Spot Runner will be getting media buyers and content owners to participate in the system.
In addition, the startup will face competition from the likes of Google's TV Ads and Microsoft in attempting to break into the nascent sector. This summer, NBC Universal said it will sell select national and local advertising inventory for its broadcast and cable networks through Microsoft's Admira marketplace.
Nevertheless, Spot Runner will attempt to give it a go. The Malibu platform was developed over the last two years with feedback and input from media companies and ad agencies, according to Gus Warren, Spot Runner's general manager of media platforms: "With their guidance we have created a platform that incorporates how the marketplace works today as well as where it is headed in the future."
Malibu is designed to manage the entire transaction process for TV advertising, including planning, buying, creative, traffic, reporting and invoicing. The platform also is built to support multiple targeting and delivery methods, including set-top box addressability.
One of the key problems the system is aimed at solving is that the TV advertising landscape has grown dramatically more complex in recent years. In 1980, according to Spot Runner, there were 11 national networks that ran 18 million ad spots -- whereas today there are more than 125 national networks that run 12 billion TV spots annually.
The company emphasizes that Malibu "protects existing relationships and points of leverage" and that it "does not commoditize buyers or sellers." Spot Runner also says the platform is built as an open platform to allow for customization and integration with existing systems.
Los Angeles-based Spot Runner, founded in 2004, originally focused on helping small businesses produce and place local TV ads.
To date Spot Runner has raised more than $120 million from investors including: Battery Ventures, Index Ventures, Capital Research and Management, CBS, The Interpublic Group, Legg Mason Capital Management, Allen & Company, Tudor Investment, WPP Group, Groupe Arnault/LVMH, Grupo Televisa and U.K. media company Daily Mail and General Trust (DMGT).
In a separate development, advertising agency WPP -- which invested $10 million in Spot Runner in 2006 -- earlier this year sued the company alleging that Spot Runner's founders "perpetuated a 'pump-and dump' scheme in which they aggressively promoted the company to new investors and then sold new investors large quantities of their own secondary shares."
A U.S. district court judge in California dismissed the WPP lawsuit in September; WPP said it would appeal, according to Dow Jones VentureWire. Spot Runner in a statement at the time said, "We are very pleased with the court's decision to dismiss the case and we look forward to putting this matter behind us. Our primary focus is continuing the strong progress we are making on the Malibu Media Platform."
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