While online advertising has captured the attention of brand marketers, television is still one of the most effective and encompassing forms of advertising. But for far too long, television has been siloed and technology has not been harnessed to optimize advertising spend. Enter Simulmedia, the data-driven, television advertising management platform that is able to introduce digital-like targeting capabilities to television campaigns. Advertisers can target granularly to ensure their message is reaching the right audience at the right time. The company, founded in 2009, has a built national reach and strong relationships with multiple broadcasting networks, ultimately lower customer acquisition costs for advertisers.
AlleyWatch chatted with founder and CEO Dave Morgan about Simulmedia’s plans for the future of TV advertising and its recent funding round, which brings its total funding to $87.3M across seven rounds.
Who were your investors and how much did you raise?
Long-time investor Union Square Ventures through their new 2019 Opportunity Fund, with participation from all existing institutional investors, including Avalon Ventures, WarnerMedia, and Valiant Capital. Series E.
What inspired the start of Simulmedia?
Simulmedia was founded more than 10 years ago to help advertisers and media owners solve the problem of growing audience fragmentation and the lack of opacity in TV and premium video advertising while driving more campaign yield. When we launched Simulmedia to bring internet-like, data-driven ad targeting and accountability to linear TV, the general feeling in the broadcast community was, “If it ain’t broke, why fix it?” Plus, they were not excited to have anyone telling them that the way they had been doing business since the start was inefficient and not accountable. But TV is waking up, and there are lots of initiatives underway (OpenAP, for example) that carry echoes of our evangelism.
How is Simulmedia different?
The company is not only different, but it is also unique in the television industry. No one else offers this end-to-end combination of products, insights, and services:
TOTAL TRANSPARENCY: We give marketers and their agencies access to the industry’s most intelligent, data-rich tech, which we’ve spent the last 10 years building. We also provide full transparency into the results that they get with Simulmedia. Of course, they know exactly what they’re paying for media and fees.
DYNAMIC AUDIENCE FORECASTING AND PATENTED REACH OPTIMIZATION: Our campaigns are planned based on a proprietary forecasting methodology that enables us to predict what, when, and where an advertiser’s audience will be watching in the future. Our media plans typically feature thousands of spots on upwards of 50 networks, which does a better job of reaching customers efficiently and effectively in today’s fragmented TV landscape.
OUTCOME GUARANTEES: Simulmedia uniquely guarantees audience reach, something no one else offers. This is really hard to do in a market featuring declining viewership and ratings, but our software and forecasting abilities allow us to do it for our clients.
ACCESS TO MORE INVENTORY: Some providers struggle to spend larger budgets as their clients’ scale, but not Simulmedia. That’s because no provider offers more network-direct relationships with linear and over-the-top (OTT) streaming inventory providers. Plus, we optimize based on an advertiser’s unique campaign objectives. That includes maximizing audience reach and acquiring new customers at a specific customer acquisition cost (CAC) threshold. We do this quickly, too; clients can get on-air in about a week.
ACTIONABLE AUDIENCE INSIGHTS: Simulmedia provides insights on delivery, reach, and performance for all of a client’s linear TV and OTT buys, across both Simulmedia and concurrent schedules, and for multiple custom audiences including CRM segments.
What market does Simulmedia target and how big is it?
We work with any company that wants to reach consumers on linear and OTT television. That includes traditional big brands that could spend more efficiently on TV and the emerging D2C brands that need TV to grow their businesses.
What’s your business model?
Simulmedia charges a transparent fee that covers technology and services, which is a percentage or function of the value of the transactions we facilitate.
Who do you consider are your main competitors?
It would be disingenuous to say we have no competition, and companies such as Tatari, Adobe, TubeMogul, and some more traditional media agencies are mentioned from time to time. Really no one else does what Simulmedia can do, though. There are firms that offer digital-like targeting but without our ability to predict where and what audiences will be watching during campaigns. There are firms that offer marketplace-like inventory buying but without the national reach Simulmedia has. There are emerging consortia that enable cross-network buying, but again nothing with our reach and flexibility. Absolutely no one guarantees results like we do.
What was the funding process like?
It was a very straightforward process for us. Union Square Ventures has been involved with us since the beginning, and they’ve invested in every one of our rounds over the past nine-plus years. Our business has grown well over the years, but the last nine months have brought explosive growth. USV had just closed on their 2019 Opportunity Fund and asked if we were interested in a new equity raise. We were. We negotiated the terms, involved the rest of our investors and board, and closed it pretty quickly.
What are the biggest challenges that you faced while raising capital?
For late-stage companies like Simulmedia, there are a lot of different types of financing vehicles out there, with most companies opting to use debt instruments or more complex equity structures. Those can get messy. We wanted to keep the capital structure and balance sheet as clean as possible, and we and our investors worked hard to create a structured that insured it.
What factors about your business led your investors to write the check?
About six months ago, we announced the unbundling of our targeted TV media offering into a transparent, software-driven, national TV ad marketplace that operates across all of the largest national TV programmers and broadcasters. Additionally, we have seen our revenue double, year-over-year, and our profit grow significantly.
About six months ago, we announced the unbundling of our targeted TV media offering into a transparent, software-driven, national TV ad marketplace that operates across all of the largest national TV programmers and broadcasters. Additionally, we have seen our revenue double, year-over-year, and our profit grow significantly.
Clearly, the mission that Simulmedia was founded on more than 10 years ago is resonating. That makes now the perfect time to strengthen our balance sheet as we prepare for even more growth from a surging market that demands a digital and data-driven approach to TV advertising.
What are the milestones you plan to achieve in the next six months?
We want to sustain our current growth rate and make sure that we are laying the foundations to build a very big business. It’s critical that we build software that solves the same problems that our customers face and doesn’t require constant customizations, which is how so much of the technology has been built – historically by too many advertising technology companies.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Focus on making your business perform. Nothing makes the process easier than being profitable with fast-growing revenues.
Where do you see the company going now over the near term?
We are focused on more than doubling our business year-over-year and growing profits. We will do that by being the first, largest and most important marketplace for targeted national linear TV advertising.
What’s your favorite restaurant in the city?
Emilio Bellato’s
