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Online Video Ad Network Tremor Media Acquires ScanScout

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Several months after raising a huge $40 million funding round, Tremor Media is acquiring streaming ad placement service ScanScout. Both companies have been expanding for the past year, attempting to better ride the growing wave of online video ad spending.

The amount was not disclosed. Under the terms of the deal, ScanScout’s brand will disappear and both companies will operate as Tremor.

While the merger of Tremor and ScanScout is largely complementary, there will be some layoffs at ScanScout — about 8 percent of the staff, paidContent has learned. Aside from dealing with a handful of duplicative roles, the deal is designed to fend off the scramble for growing advertising dollars in the video space. This summer, eMarketer estimated that U.S. online video ad spend will rise 48.1 percent in 2010, to $1.5 billion. Meanwhile, WPP’s Kantar Video projects that spending in that space, including mobile and online, could reach $10 billion on a global level in just five years.

For Tremor and ScanScout, the deal isn’t just about increasing their reach among audiences — it’s about accessing a greater slice of advertisers’ spending. Once the merger is complete, the deal will increase the amount of ad impressions Tremor and ScanScout can scale. Specifically, Tremor Media’s Acudeo Platform offers advertisers reach across 3,500 sites, as opposed to just one site like Hulu. It also is aimed at helping publishers manage their entire in-stream inventory, as more websites look to ramp up their video offerings. Besides, with many advertisers looking to buy audiences, as opposed to sites directly, it could help both companies capture the ad dollars that are flowing to online video.

-Over the past few months, Tremor has added a number of high profile execs. A few months ago, Tremor tapped former Google (NSDQ: GOOG) exec Matthew Corbin to the new position of VP of global platform solutions. Corbin, who served as the head of YouTube’s global partnerships and revenue operations for North America, Latin America and EMEA, was charged with heading up Tremor’s video platform and network strategy.

“The online video ad network space has just gotten easier for the demand side and substantially more challenging for the fledgling independent networks,” Bill Lederer, CEO of Kantar Video, said of the deal. Lederer pointed to Tremor’s already extensive reach and respected management and distribution. On the other side, he pointed to ScanScout’s “excellent, scalable ad targeting technology and team.”

There has been heightened expectation of merger activity in the online video space. The combination of Tremor and ScanScout will only raise the bar on those looking for deals, especially established videos services companies such as YuMe, TidalTV, BrightRoll, all of which have raised substantial sums of capital over the past year.