Teads: Chronicle of a successful adtech build-up
By Jean-Marc Patouillaud, Managing Partner Partech Ventures
This is a veritable story of lions meeting stars. On one side, there are the lions: Pierre Chappaz and Bertrand Quesada, eBuzzing founders and aggregators. And on the other, the stars: Loïc Soubeyrand and Loïc Jaurès, who started Teads in 2011.
The lions moved quickly, offering advertisers (brands) a catalogue of clever solutions for providing visibility on blogs, forums and downloading platforms. This is what is called a “long tail”: a high volume of non-strategic advertising inventory with low audience each.
In Montpellier, the stars at Teads had developed a revolutionary ad format called “outstream”. It offers advertisers access to video advertising in major daily newspapers and international magazines such as Le Monde, Financial Times, Forbes and others, by creating advertising inventory in “premium” media sources where this was not present before.
These media, which are among the most widely-read websites and web applications, have very little editorial video content, unlike their major competitors such as YouTube that can place a video ad immediately before the real content (pre-roll ads). Outstream ads can be inserted in articles without hampering the reader’s direct access to the content. This ingenious style of advertising is a revolution for these major premium publishers as well as for advertisers. Advertisers can communicate within a New York Times article read by millions, and the type of content helps target the ads. For readers, outstream makes it possible to avoid the frustration of pre-roll ads which fill the screen, sometimes for dozens of seconds.
Three months after Partech’s investment in Teads in 2013, the lions and stars collided offering them a perfectly crafted sales and marketing war machine. The merger of eBuzzing and Teads took place in late 2013 and saw immediate success: €50 million in consolidated revenue in 2013, €75 million in 2014, €125 million in 2015 and €180 million in 2016, with growth continuing in 2017. It expanded to locations worldwide, from Tokyo to Bogota. In two years, the United States became Teads’ leading market, having established five locations across the country. To ensure a successful merger, the Board of Directors was made up of management and the main investors from the two companies (LightSpeed and Gimv representing eBuzzing and Partech for Teads). The Board convened in turn in New York, London, Hamburg, Miami and Paris to network meet with the local directors and get a better feel for the ground. This provided an extremely strong point of cohesion for the five hundred employees.
Teads’ recipe for success is based on simple ingredients with perfect execution: bringing together highly complementary directors, a video market which is growing exponentially compared to other ad formats, and the ability to provide brands with a premium global inventory. Above all, Teads’ success stems from the vision in which the company’s management and investors have always believed: that the effectiveness of advertising is measured in terms of the satisfaction of three parties.
The first is the advertiser, who must have a targeted accuracy in a wide reach, while ensuring that the medium is coherent with the brand.
The second is the publisher, who has to find new resources in a world of media where revenue models are being turned upside down, without ever lowering its image.
And finally, there is the reader, who should never feel held hostage with respect to visual saturation or personal online tracking.
In the world of adtech where, paradoxically, buyouts are becoming increasingly rare, the proliferation of data management solutions need to conform to this third rule. The GDPR (General Data Protection Regulation), which comes into effect next year, is a regulator that will absolutely need to be taken into account.
Stars may now face a new kind of lion.