Federated Media on Tuesday announced the sale of its content marketing arm to LIN Media and the rebranding of its programmatic arm to sovrn Holdings, Inc.
The publisher-side technology company -- which brands itself as “sovrn” with a lowercase “s” -- is now fully invested in all things programmatic, including real-time bidding (RTB), “programmatic direct” sales and private marketplaces.
Walter Knapp, former chief operating officer of Federated Media, has been named CEO of sovrn. He spoke with RTM Daily about the decision to sell the content marketing arm and focus entirely on programmatic sales, what the company actually does and where the media-buying industry is heading.
RTM Daily: Is there any “Federated Media” brand still in existence at sovrn?
Walter Knapp: Federated Media was what was sold to LIN Media. What we retained was the programmatic ad stack and the publishers and Web sites -- the complete programmatic business.
The Federated Media brand name was sold to LIN Media. Our existing investors stay with us, as will all of the proceeds from the sale.
RTMD: Will everything your company does be fully programmatic now?
Knapp: Sovrn is a programmatic business. I want to make clear that we will still do a lot of direct work, but it will be done programmatically. This is sometimes referred to as programmatic direct or premium programmatic. What we do encompasses all of those.
RTMD: What will you brand yourself as? A supply-side platform (SSP)?
Knapp: That is a great question. The short answer is “yes,” but we do more than the SSPs you think of -- the Admelds or PubMatics or Rubicons.
While we enjoy the exact same tech stack -- we have the same programmatic functionality as them in terms of RTB infrastructure and operation of data centers -- there's more. The heart of this company is a publisher platform, which is distinct from a SSP.
Our publisher base is not the comScore 1000. We tend to go into the mid- and long tail. We work with niche publishers, digital-only publishers, niche magazines, etc. What makes us unique is that we provide those publishers with tools and technologies that either we develop or third-party partners develop to help them better understand and engage their readers. We do that, and we offer full SSP functionality.
RTMD: Can you give an example of some of those “tools and technologies” you provide to the smaller publishers?
Knapp: Sure. Take third-party partners, for example. There are literally thousands of widget developers creating useful apps for publishers. We’re making those available on the platform. Plus, there are the tools we create, such as on-site search, listing popular stories, other “reader” widgets.
We also have an analytic insights widget that allows publishers to see how marketers are viewing their readership, and how they compare to other similar publishers. Those are some examples of what we provide in addition to the more traditional SSP features.
RTMD: Back to the sale. What would have sold for more -- the content marketing arm that did sell or the programmatic arm that you are now the CEO of?
Knapp: I don’t think we know the answer because we didn’t seek a buyer for the programmatic business. Ultimately, it’s what someone is willing to pay that determines value.
We have a high growth and high value trajectory, comparatively. For example, the programmatic arm surpassed the content marketing business at Federated Media around Q1 of last year in terms of revenue. The programmatic business saw revenue growth of 93% year-over-year. We exited last year paying more than $2 million a week to publishers across our platform. That should give you an idea of the size.
RTMD: Why choose the name “sovrn,” and why go with the funky spelling?
Knapp: In the naming process, we talked a lot about independence, which resonates with the word “sovereign.” At the core, we’re all about empowering independent publishers to control their own destiny. There’s also a double meaning; at one point it was the word for currency in Europe.
We made it “sovrn” to be shorter, bolder and more eye-catching.
RTMD: Do you see the future of digital media buying being automated as much as possible?
Knapp: The short answer is yes.
The horse is out of the barn, and marketers are getting increasingly sophisticated in how they leverage data to make decisions, and I don’t think the genie is going back in that bottle. Publishers have been outmatched in this space because marketers are so much more sophisticated when it comes to data consumption and use. They see a much broader footprint. They are at a central point, while publishers are usually confined to their own readership. So we try to level out the balance a bit on behalf of publishers.
I've seen programmatic testing on different creatives, A/B testing on the fly, etc. That will continue and the whole market will get smarter based on the data that’s now available. At the same time, there are always aspects in any business for human interaction and creative work to occur. That’s not going away.