New York Mercantile Exchange (NYSE) traders today, Wednesday, April 21, 2021.
DoubleVerify, which creates software for digital media advertisers, closed 33% after launching its initial public offering on Wednesday.
The shares opened at $ 35, the IPO price at $ 27, reaching a market value of more than $ 5.3 billion. Shares closed at $ 36.
The company provides software for measuring digital media advertising, campaign effectiveness and analysis. It seeks to help advertisers ensure that ads are visible, not fraudulent, in the right geography, “brand safe”, or not related to content that advertisers may find problematic, such as conflicting political content or fake news. It integrates directly with software players (like The Trade Desk և Google), social media platforms (like Facebook, Google YouTube և Snap) և connected TV players (like Amazon և Roku).
“Think of us as advertising security software,” Mark Zag Agorsky, CEO of DoubleVerify, told CNBC. “We guarantee that the ad transaction is fraudulent, that the ad is delivered to the real person who actually sees it, not to the bot, that it is displayed in a safe context for the brand.”
The company is in the last month of a number of advertising technology players that have been released in recent months, including PubMatic, Viant և Kubient.
“As dollars continue to move into digital, even digital, areas such as television, fraud continues to be a challenge to build trust between buyers and sellers,” said Zag Agorsky. “The environment for our products has never been so mature.”
DoubleVerify’s revenue in 2020 was about $ 244 million, up from $ 183 million in 2018. According to S-1, the company has about 1,000 customers.
“We have a really nice diversification of customers,” said Zag Agorsky. “At Covid last year, when retail and travel just collapsed, we still managed to grow 22% in the second quarter …”
He sees the growth coming from new areas of coverage, such as deepening television, audio and podcasting. According to him, the growth should come from new geographies, new products.
DoubleVerify said in a statement that its main competitors are other digital ad metering providers, such as Integral Ad Science, as well as Moat and Grapeshot, which are part of the Oracle Data Cloud. It says other companies provide point-and-shoot solutions that address some aspects of measuring digital advertising. Google also announced last week that it would add a new tool to make it easier for advertisers to block websites and domains that do not meet their brand security standards.
Providence Equity Partners acquired a majority stake in 13-year-old DoubleVerify in 2017. In November 2020, the company, led by Tiger Global Management, raised about $ 350 million in private equity.
Davis Noel, CEO of Providence և Chairman of DoubleVerify’s board, told CNBC that he believes DoubleVerify plays a unique role as an independent way to measure the effectiveness of digital advertising.
“When we first invested, it was clear that the digital advertising ecosystem needed an independent source of measurement that would bring that transparency to the entire ecosystem,” he said. “And that’s not what Google, or Facebook, or The Trade Desk, or anyone who is really into buying and selling media, can do.”
MKM Partners wrote in a post that DoubleVerify is taking advantage of trends such as digital advertising growth and software advertising. They added that its core value proposition depends on three growing centers: the ability to protect brand reputation, detect fraud on the Internet, and measure the effectiveness of advertising costs. They cited a growing group of the company’s large customers with annual revenue of at least $ 1 million; From the 25th of 2018 to the 45th of 2020.
But MKM said the company also faces the risk of intrusion from large walled gardens and major players in advertising technology, such as The Trade Desk. He added that although the company did not mention that there is a risk of customer concentration, the customer will make more than 10% of its revenue in 2020. DoubleVerify advertising clients.
Sharpening of tools
The idea of ”brand-safe” advertising has been criticized, especially at the beginning of the epidemic, when brands used it to avoid being exposed to coronavirus-related content.
Zag Agorsky said the company has been working to develop some of these tools.
Every dollar that goes to false rumors or political hate speech is a dollar stolen from a legitimate publisher. “Our goal is to build stronger relationships between legitimate publishers and advertisers so that real content is funded.”
Zag Agorsky said this suggests the company is confident it is using a scalpel against a “meat grinder”. It presupposes the evolution of how a company looks at content, for example, լինել being more deliberate in the context in which a word may appear. shooting star. ”
The company also works with advertisers on “brand compliance” levels to determine the level of sensitivity to certain categories.
“Instead of working with a butcher and saying, ‘I do not want to be about a political speech, I do not want to be about something that has this kind of dialogue,’ they may be sensitive about it.” he said. “And that sensitivity can vary by brand or by region.”