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Tremor Video Is Serving Up an IPO

Video ad operator is riding a powerful megatrend


Online video ad network operator Tremor Video has been a much-rumored IPO candidate, but the recent filing of an S-1 puts some truth behind the buzz.

Founded in 2005, the company has turned into one of the top players in its space. Tremor’s platform, called VideoHub, allows customers to display ads across many platforms, including desktop computers, smartphones, tablets and even connected TVs. It also does this in a brand-safe way; i.e., ads do not appear on obscene or offensive videos!

Tremor also leverages rich analytics to monitor the ROI on campaigns. For example, Tremor has sophisticated technology that measures engagement (the interaction of a viewer with a video ad), brand lift and time spent.

All this has become a key part of the core business model. Tremor prices its service based on the cost-per engagement or CPE, which has turned out to be a great way to align its own interests with customers’.

To build a foothold in the market, Tremor has built up a thriving ecosystem that involves arrangements with 500 websites and mobile apps; more than 200 have exclusive partnerships. As a result, Tremor has put together an impressive customer list that include all of the top 10 automakers and nine of the top 10 consumer packaged-goods companies.

Tremor is solid on the growth side, with revenues improving 16% year-over-year in 2012 and the net loss decreasing by about 21% to $16.6 million.

While the competitive field is ugly — including Hulu, Google‘s (GOOG) YouTube, YuMe and BrightRoll — the market should be large enough to accommodate multiple players. According to eMarketer, the online video ad market is expected to increase by nearly 29% per year until 2016, reaching $8 billion at that point.

But the mobile video segment is expected to be even more explosive. That market is forecast to hit $2.1 billion within the next three years, up from $244 million in 2012. To pull this off, there will certainly be lots of demand for tools like Tremor’s.

The company plans to list on the New York Stock Exchange under the symbol “TRMR.” Lead underwriters include Credit Suisse (CS), Jefferies (JEF), Canaccord Genuity and Oppenheimer.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll 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.

Article printed from InvestorPlace Media,

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