When Opera Mediaworks sold its browser business to a Chinese consortium led by Qihoo-360 for $600m last summer, with it went the Opera name. And the company decided that going forward, the remaining, ad-tech parts of the business would trade under the name of AdColony.
The move raised a few eyebrows at the time. After all, the Opera Mediaworks brand was well-known, and AdColony was just one of several ad tech businesses the company had bought over the previous few years. So what was the logic behind the rebrand and what impact has it had on the business? These are questions I put to AdColony CEO Will Kassoy when I spoke to him yesterday.
To understand what happened, Kassoy told me, you have to go back to Opera’s roots. “The Opera browser has been around for over 20 years and was a challenger brand to Google and other browsers,” he said. “Its strength was around data compression and open source code where they built a good business, particularly in emerging markets like India, Africa, Indonesia and Russia, where people are very data-sensitive.
“Six years ago, there was no ad division within Opera and so they said they needed to invest in advertising, because it’s what drives the business model. So from 2010 through 2016, Opera acquired 12 companies in the ad tech space. These were all independent brands, and once they finished their earnout period they folded into the Opera brand, but the reality was that there was not a lot of synergy between the advertising division and Opera due to the mismatch in markets. The browser was strong in developing markets where the advertising market was not as big, whereas the ad division was strong in more developed markets such as the US, Europe, Japan and China, where the browser didn’t have much traction.
“So that initial strategic intent of creating synergies, with the ad division driving revenues from the browser, never really happened. So in the fall of 2016, we sold off the browser because we could not realise those synergies, and then as a pureplay ad tech company, the Opera branding made no sense. So we looked at the 12 acquisitions, and asked ourselves if there was a brand that it would make sense to elevate to be the overall brand, and AdColony was the natural choice, because it represented two thirds of the company’s revenues and was actively deployed with our performance business and the developer community.
“Before the rebrand, half our revenues came from brand advertising and half from performance and the whole performance bit was AdColony. Developers had very good perceptions of the AdColony brand so it was natural to extend it across the business, but before we rolled it out we did a refresh, gave it a slick, new, modern look, changing a lot of the elements that might have seemed developer-centric, and updating a lot of the imagery to be more about pop culture and youth and millennials and give it a more hip feel.”
Business as usual
So what impact has the rebrand had on the business? Kassoy claims it’s been a seamless transition, business as usual.
“The majority of our business is with the third party ecosystem, publishers who integrate our tech to monetise their freemium apps, and advertisers who want to reach those audiences, and strategically, our focus has always been on the top 1,000 apps.
“From a business model perspective, we developed some technology that sits in an SDK and helps deliver a better user experience and better data signals, as opposed to a lot of players in the ad tech space who are connected server-to-server and plugging in to a commoditised ad unit type,” Kassoy says. “So it’s a better user experience, with better data signals, but the downside for us is that it does take a long time to get an SDK integrated into the publisher’s app. So instead of being in 200,000 apps, we focus on fewer, higher quality apps, and we are second only to Google in the top 1,000 apps globally, which include a lot of gaming and music apps.
"When you look at the recent horror stories around brand safety, this plays well into our strategy because we curate so many of the apps that are in the top 1,000. A lot of advertisers are comforted by the fact we are not in 20,000 or 200,000 apps.”
In terms of ad formats, Kassoy says that video is a key focus for the company, accounting for two thirds of its revenues, but adds that he’s more concerned with the user experience.
“AdColony was one of the 12 acquisitions and was solely focused on video, but the others included rich media, native ads and banners, but at the end of the day, we are more guided by outcomes,” he says. “We think about the user experience, what is the consumer’s state of mind, and how do we leverage creativity and data science to deliver the best outcome. It’s not about pushing impressions, it’s about getting about engagement and moving someone from awareness to deeper consideration to action and purchase. Whether it’s video, rich media, display, native, what guides us is that we want to be the outcomes company.”
In AdColony’s previous guise, it was responsible for gobbling up a dozen smaller independent ad tech firms, but there are still hundreds, thousands even, of them out there, so I was curious to hear Kassoy’s take on the ad/martech lumascape. Is it realistic to expect the ecosystem to support so many companies, when so much of the money spent goes to Google and Facebook?
“I agree there are way too many companies,” he says. “It’s like a logo parade of all these different companies all trying to do a little piece of the ecosystem; there is no way this can be sustained. I keep trying to get them to do a lumascape of just the companies with revenues of over $500m. We are proud to be one of these companies that have tremendous scale and breadth. At the end of the day you have to provide value. We are seeing a lot of consolidation and we believe there is room for independence as long as you are adding value and our focus is on doing just that, and helping marketers to reach the other 57 per cent of time people spend outside of social, while providing a better user experience and better outcomes.
“On the Google and Facebook thing, I used to work in TV and you had the networks and cable, and if you put all your spend into Google and Facebook, it’s like putting all your money into in one or two stations, you are not going to maximise your reach. We feel we are one of leading independents that complements Facebook and Google to extend reach in environments that really matter.”
Will Kassoy is CEO of AdColony