For those of you that haven’t noticed, cable companies have been spending a fortune just to keep their existing customers. Why? Well, the growing popularity of Over-the-Top (OTT) video, which is video carried to a TV connected to the internet, is shifting the traditional TV landscape, bringing interactivity, data, and targeting long associated with digital media to the television ecosystem. It’s also opening up a new level of choice in content and pricing models for consumers who can choose from a continually growing menu of apps with professionally produced as well as user-generated content. To put a personal touch on this topic, I purchased a Smart TV about a year ago and it is amazing how many options are available to me on my television now that I have live internet connection to my TV. The other group benefiting is marketers. The advertising world now has the opportunity to create dynamic, interactive, even “shoppable” ad experiences that can drive increased engagement and brand recall, bringing consumers further down the purchase funnel. That sounds great, but how do they know how, when, what and where to deliver that content? Enter little known OTT data giant, PeerLogix, Inc.
PeerLogix (LOGX) is an advertising technology and data aggregation company providing a proprietary platform which enables the tracking and cataloguing of OTT viewership and listenership in order to determine consumer trends and preferences based upon media consumption. PeerLogix’s patented platform collects over-the-top data, including IP addresses of the streaming and downloading parties (e.g., location), the name, media type (whether movie, television, documentary, music, e-books, software, etc.), and genre of media watched, listened or downloaded, and utilizes licensed and publicly available demographic and other databases to further filter the collected data to provide insights into consumer preferences to digital advertising firms, product and media companies, entertainment studios and others.
Per an article in Forbes, “2017 saw tremendous consumer growth in streaming TV services (ROKU, NFLX, DIS) and 2018 is set to be even bigger. This year, eMarketer estimates that 181.5 million U.S. consumers will use connected TVs at least once every month — equating to more than 55% of the U.S. population — and by 2021, that number will expand to 194.4 million, which is almost 58% of the population. The pace of digital disruption that is transforming the TV industry is accelerating: the growth in IP-delivered TV content is reshaping distribution models, consumer viewing habits and advertising. Every major TV operator has launched or is in the midst of launching and scaling up their direct-to-consumer streaming offerings. Consumers now have more choice than ever — from DirectTV Now, FuboTV (a Premion partner), Sling TV (a Premion partner), PlayStation Vue and YouTube TV, to name just a few. Philo is another recent entrant that offers 30-plus entertainment channels. Disney has plans to launch two streaming services and may develop even more following its 21st Century Fox deal.
The Trade Desk Inc. (TTD) walloped earnings expectations in a report last Thursday thanks to huge gains for advertising on streaming-video services. Chief Executive Jeff Green credited the strength of the overall online advertising business, driven by mobile video and streaming TV. “Streaming TV is the fastest-growing segment of our business,” Green said by phone. Green continued, “In the fourth quarter, we saw connected TV ad spend going up by 535%,” Green said. “We think it’s an indication that big brands are moving a significant amount of their budgets, and they’re going into connected TV and video…” As inventory continues to grow at a rapid pace, pushed by the likes of Roku Inc. (ROKU) and its ad-supported streaming channel, Green says that big brands are moving into streaming TV advertising. The company said in its earnings release that connected TV spending grew nearly 2,000% year-over-year in the first quarter, even faster than previous large leaps.
At the end of the day what does this all mean for PeerLogix? If large advertisers are going to target consumers on OTT they need to understand consumer behaviors. Google is the best advertiser on Earth because they have significant data or insight on anyone using their products. Google (GOOG) is not allowing us all to use Gmail, YouTube or you name it Google product for philanthropic reasons, they want our data. PeerLogix enables the tracking and cataloguing of OTT viewership and listenership in order to determine consumer trends and preferences based upon media consumption. They offer knowledge to advertisers and knowledge determines advertising budgets and those budgets sure seem to be getting fatter per the TTD earnings call.
Sylva International currently holds restricted common shares in PeerLogix which were issued as a result of Sylva’s engagement by PeerLogix. Sylva’s engagement by PeerLogix concluded on March 2017. Sylva reserves the right to purchase additional common shares of PeerLogix, hold its existing common shares of PeerLogix or liquidate its common shares of PeerLogix at any time, with or without notice.
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