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Summary:

Online ad management provider Operative Media has raised a $10 million funding round from ORIX Venture Finance and a private investment firm…

Mike Leo, Operative

Online ad management provider Operative Media has raised a $10 million funding round from ORIX Venture Finance and a private investment firm, as the company looks to expand its international presence. The company plans to make a series of “sales talent acquisition” moves throughout North America, the UK, Australia and Brazil over the next few months.

The funding follows the recent Solbright acquisition and launch of Operative.One and will support further growth and expansion initiatives. Secondly, Operative will also use the new capital to enhance its offerings to both supply side platforms (in other words, publishers) and demand side platforms (agency trading desks and their intermediaries).

“Ten years ago, Operative was an advertising services company, then we became a product company, and now, we’re a platform company,” said Operative CEO Mike Leo in an interview with paidContent. “We don’t compete with anybody and we’re platform agnostic. We don’t ever want to be an ad network. We serve agencies, publishers and networks.”

The premise of Operative’s services is to make transaction costs lower. Along with the lack of a standard metric, that’s the primary cause for the gap between offline and online ad spending, Leo said. “The biggest challenge is that everyone is working in production systems and this is a space that has been utterly disrupted. Companies are spending 30 percent of their revenue on transaction costs. The question we hear from our prospects is how do you reduce those costs to between 5- and 10 percent. It’s the reason why agencies don’t spend more on digital. And we aim to solve that.”

As part of the evolution of Operative into a “platform services” company, in October, it launched Operative.One, which integrates all the processes and systems necessary to package, sell, traffic, manage, optimize and bill ads. After that, Operative bought Solbright, which was its main competitor, as a bid to increase its marketshare. As a result of that deal, Operative now claims to have 30 percent of US digital ad spend running, 50 percent of the top 50 online publishers which includes 60 percent of the Australian online publisher market.

The company will likely look for additional funding in the latter half of next year to help support larger acquisition plans.

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  1. Wow! An Aqhiring fund!

    Also, when I hear, “xxx was an advertising services company, then we became a product company, and now, we’re a platform company…” I can’t help but think, “when are you going to make up your mind?” — but I get what they’re saying, despite that urge.

  2. Its pretty insane how much money companies end up blowing on weird things. What could be a simple decision of turning the company in the right direct turns into a multi million dollar issue which could be used to expand the company.

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