Spot Runner

Spot Runner logo

Headquartered in Los Angeles, Spot Runner develops technology platforms and delivers services for video advertising, namely broadcast, cable and online video. Spot Runner’s mission is to leverage technology and data to transform the way advertising is created, planned, bought, sold and optimized in order to maximize value, at scale, for media owners, agencies and advertisers.

History

Spot Runner was founded in 2004 by co-founders Nick Grouf and David Waxman.

Spot Runner was originally created based on the idea that the Internet could help make television advertising more affordable and accessible for local businesses in order to level the playing field against larger competitors. Spot Runner developed a platform for local TV advertising that helped to automate and increase the efficiency of the creative and planning process. However, the media buying process remained a manual task that required phone calls, email and faxes. The company quickly realized there was a great need industry-wide for a more efficient buying process and it set about to build that new technology solution. After more than two years of development, Spot Runner recently launched the Malibu Media Platform, a web-based technology platform that improves the process of buying and selling television advertising to benefit media sellers, ad agencies and their clients.

Business divisions

Spot Runner is divided into two primary lines of business: the Malibu Media Platforms Group and the Marketing Services Group:

Spot Runner’s Malibu Media Platforms Group oversees the Malibu Media Platform, a web-based technology platform that improves the process of buying and selling television advertising to benefit media sellers, ad agencies and their clients. Malibu offers media sellers an effective way to reach, sell and service media buyers while offering media buyers a more efficient way to find, buy and measure television advertising. Spot Runner launched the Malibu Media Platform on November 19, 2009.

Spot Runner’s Marketing Services Group offers branded direct response marketing services for off-line and digital national advertisers, leveraging the best practices of strategic planning, creative, media planning/buying and analytics for mid-enterprise companies.

Funding

Spot Runner has raised more than $140 million to date. Its investors include CBS, Daily Mail and General Trust, Interpublic Group, Grupo Televisa S.A.B., Groupe Arnault/LVMH, Allen & Company, Legg Mason, Tudor Investment Corporation, Capital Research and Management, Lachlan Murdoch, Vivi Nevo, Index Ventures and Battery Ventures.

Criticism and controversy

Impacted by the recession and companies pulling back their marketing spend, Spot Runner enacted several rounds of layoffs in late 2008 and early 2009.


Lawsuits

On April 9, 2009, WPP, a minority shareholder, filed a complaint against Spot Runner in the United States District Court for the Central District of California. WPP alleged that Spot Runner’s board members failed to disclose to WPP the stock sales of other investors, in violation of the board’s obligations to stockholders, among other things.

The lawsuit states that the company had a loss of $45 million in fiscal 2008, on revenues of only $9 million. And in fiscal 2007, it lost $35 million on revenues of $5 million.

And here’s the zinger. While Spot Runner was losing all that money, its founders and two early investors (Index Ventures and Battery Ventures) sold shares worth $54 million. CEO and founder Nick Grouf took the lion’s share of those proceeds, netting $26.7 million in five transactions between Feb/March, 2006 and March, 2008. Battery and Index each sold $11.7 million worth of shares (nearly doubling their initial investments of $6 million each). While co-founder David Waxman walked away with only $3.6 million and investor Bob Pittman $365,000 worth of shares.[1]

Spot Runner subsequently filed a motion to dismiss, which basically asked the court to throw out the complaint. In September, 2009, the court granted Spot Runner’s motion and dismissed WPP’s complaint with “leave to amend.” That gave WPP the right to re-file and try to correct the various defects in their case. Despite the dismissal, WPP chose to continue pursuing the case by re-filing. Spot Runner filed a motion to dismiss again and is currently awaiting the court’s ruling.

In August, 2011, an appeals court ruled that WPP could sue co-founders Nick Grouf and David Waxman individually.[2] At that point, journalist Kunur Patel found that

Spot Runner's current status is unclear. Press releases on the company's website were last updated in 2010. A call to the phone number listed Spot Runner's website redirects to an individual's cellphone...

Audience

Spot Runner serves three primary audiences: advertisers, media owners and advertising agencies. In order to address the needs of these audiences, Spot Runner is divided into two primary lines of business: the Marketing Services Group and Media Platforms. Spot Runner’s Marketing Services Group offers advertising services for TV and online video. Marketing Service’s offers targeted advertising (including creative services, analytics and dashboards, and media planning and buying) for businesses and use technology to measure the impact of and bring accountability to offline media. Spot Runner’s Media Platforms Group supports media owners, agencies and advertisers in selling, planning, buying, trafficking, measuring and optimizing advertising campaigns with their technology. The group’s first product, Project Malibu, is an all-digital marketplace for all forms of video and TV advertising.

Funding

Spot Runner received $10 million in its Series A financing from Index Ventures and Battery Ventures in early 2005, disclosed at the company's launch on January 11, 2006.[3] The start-up received another financial boost on October 30, 2006, when the company announced that WPP Group, CBS Corporation and Interpublic Group, in addition to other key investors led by Lachlan Murdoch, had made equity investments in the company.[4] The company also announced a round of funding in May 2008 from global media leaders Daily Mail and General Trust (DMGT) and Gruupo Televisa, along with Legg Mason and Group Arnault/LVMH.

In total, the company has raised $111 million.[5]

Acquisition rumors

After Spot Runner's initial launch, many in the business media speculated an acquisition of Spot Runner by Google or Yahoo was imminent.[6] Most large companies are no longer interested in media services from this area, however, and acquisition talks with Microsoft did not lead to an agreement.[7]

References

  1. ↑ Erick Schonfeld, The Spot Runner Saga Continues: Founders Accused Of A "Pump And Dump" Scheme (Updated) April 19, 2009 http://techcrunch.com/2009/04/19/the-spot-runner-saga-continues-founders-accused-of-a-pump-and-dump-scheme/
  2. ↑ Kunur Patel, Court: WPP Can Sue Spot Runner Founders Alone August 31, 2011 http://adage.com/article/agency-news/court-wpp-sue-spot-runner-founders/229548/
  3. ↑ "Interview with Nick Grouf, co-founder, Spotrunner", socalTECH, January 11, 2006.
  4. ↑ "TV ad start-up Spot Runner lands $40 million", CNET, October 30, 2006.
  5. ↑ "Spot Runner Closes $50 Mil.+ Funding Round", Adweek, May 7, 2008.
  6. ↑ "Will Google Buy Spot Runner?", StartUp Beat, April 12, 2007.
  7. ↑ Rumormonger: Microsoft board nixes $550 million bid for Spot Runner ad agency

External links

References