When a company writes an S-1, a big focus is on the marketing angle because how the messaging hooks investors is crucial.
And amid a slew of ad-tech operators, we just got an interesting example of the kind of tactics companies use.
During the past few months, two companies in the space have pulled off their IPOs: YuMe (YUME) and Tremor Video (TRMR). Both are in the red since going public, and a small reason for that might be found in their S-1s, where there’s a heavy focus on their roles as ad networks — a place where Google (GOOG) and Yahoo (YHOO) play, where margins can be thin, and where the technology can be tough to differentiate.
So here’s how YuMe describes its platform:
“Our proprietary technologies serve the specific needs of brand advertisers and enable them to find and target large, brand-receptive audiences across a wide range of Internet-connected devices and digital media properties.”
As for Tremor:
“Our proprietary technology, VideoHub, analyzes in-stream video content, detects viewer and system attributes, and leverages our large repository of stored data to optimize video ad campaigns for brand-centric metrics.”
When you cut through some of the buzzwords and verbiage, they both describe ad networks — they process information and deliver ads across a network.
So when another player in the space, Rocket Fuel, recently filed its S-1, it was funny to see it took a different tack in its opening:
“(We are) a technology company that has developed an Artificial Intelligence and Big Data-driven predictive modeling and automated decision-making platform.”
No mention of “ad” or “advertiser,” so it certainly doesn’t sound like it’s trying to hammer home the point that it’s an ad network.
Also of note, the company did throw in the a mention of “Big Data” up front, and peppered that in 15 times throughout the S-1, vs. one instance for YuMe and none for Tremor. Funny that … Big Data has been red-hot in the IPO market. For instance, Splunk (SPLK) is up more than 70% year-to-date, and Tableau Software (DATA) has more than doubled from its IPO price of $31.
None of this is to say that Rocket Fuel’s word play will make an enormous difference, as IPO investors can be discerning.
But when it comes to pitching a deal, the message is crucial — and Rocket Fuel appears to get it.
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.