How SpotX will evolve following full acquisition by RTL Group

At the end of last month, SpotX, the video ad serving platform, was fully acquired by RTL Group, continuing not only a trend in ad tech consolidation but also more interest in firms that have connected TV and OTT expertise.

Since RTL first took a stake in SpotX in 2014, the company has added over 150 new employees and has nearly double net revenues; three years later, SpotX was purchased at a $404 million valuation. Current clients of SpotX’s platform include Thomson Reuters, Meredith Local Media Group, Vevo, Gameloft, Cheetah Mobile, Sling TV, and Vudu, among others.

Following the purchase, RTL plans to allow SpotX to continue operating independently, with co-founders Mike Shehan, CEO, and Steve Swoboda, COO/CFO, staying on to lead the team. For RTL, they are acquiring one of the leading video ad serving companies, which will help RTL and RTL clients better monetize and deliver OTT and IPTV content.

One immediate result of the acquisition is that SpotX will partner more closely with sister RTL Group company, Smartclip, to reach consumers watching video across all screens. For more on the implications of the acquisition, we spoke with SpotX CEO Mike Shehan:

Found Remote: How does RTL taking full ownership help SpotX in the long term?

Mike Shehan: Instead of selling to a major US technology company and becoming just one feature of a giant ad tech stack or walled garden, SpotX elected a route that will allow us to operate independently while becoming a core part of RTL Group’s global business and strategy. Having resources of a large company behind us while still maintaining our aggressive startup culture has been the key to our success over the past few years, and we expect this to continue. In addition, as RTL announced, ours is one of many investments and acquisitions they will be making in the ad tech space. There aren’t many companies out there that have as much expertise in broadcast, content production and ad tech as RTL Group. Our clients will continue to benefit from that expertise and SpotX’s autonomy in the years to come.

FR: How will SpotX work more closely with other RTL companies like SmartClip?

Shehan: The companies comprising RTL Group operate in a decentralized fashion which allows SpotX to thrive and grow as the last independent digital video ad monetization platform while providing significant opportunities through partnership with the many members of RTL Group.  We’ve already formed JVs with RTL Netherlands and IP Deutschland, both of which lead to successful entries and operations within their respective markets. You will also see more cooperation between SpotX and SmartClip with the explicit goal of providing the most advanced advertising solutions to monetize every screen where consumers watch video on a global basis. Expect more announcements to follow.

FR: Which components of SpotX’s roadmap will be accelerated as a result of the investment?

Shehan: We can’t comment specifically on which components we’ll accelerate; however, we can say that OTT and CTV—particularly inventory associated with live broadcasts—are the most challenging but fastest-growing parts of our business. The investment by RTL in combination with some of their other assets will further enable SpotX’s customers to successfully tackle the challenges associated with this once-in-a-lifetime transformation of TV.

Adam Flomenbaum

The new Found Remote