In 2018, I stood on the floor of the New York Stock Exchange and watched LiveRamp begin trading as its own company. That photo above is me at the NYSE that day.
Last week, Publicis announced it would buy LiveRamp for $2.5B. The news brought back memories - and mixed feelings. What happened between that NYSE moment and this deal is worth telling.
Let’s break it down into 3 big questions:
1) What role has LiveRamp played in TV advertising?
2) Where does LiveRamp sit today?
3) What's their next act?
What role has LiveRamp played in TV advertising?
LiveRamp connects data. If you wanted to target a specific audience on TV in the past decade, you almost certainly used them. They hold about 70% of the onboarding market.
At my previous company, Targeted Victory, we started working with LiveRamp during the 2012 election. They quickly became one of our most important partners - right alongside Google, Facebook, and Lotame. Back then, LiveRamp was moving data between all of our digital partners but had no role in the linear TV piece. Yet.
That changed when we launched Cross Screen Media in 2017. Both companies saw the same opportunity: take what works in digital ads and bring it to television. RampUp became increasingly focused on TV between 2017 and 2022. The conference even had a separate TV track. LiveRamp made big moves, such as acquiring Data Plus Math in 2019, adding measurement to its identity toolkit.
The 2020 RampUp ended with the advanced TV group on a bar crawl through San Francisco as COVID crept closer. It was the last big industry gathering before the world shut down - and probably the peak of LiveRamp and TV advertising.
Where does LiveRamp sit today?
LiveRamp is a bigger company today - 3X the revenue of 2019. But dig into the growth, and you see the problem:
The math tells the story:
1) 846 customers
2) $813M in revenue
3) $961K per customer
LiveRamp grew by getting bigger customers to spend more, not by reaching more of the market. A recent podcast with LiveRamp co-founder Auren Hoffman put it plainly: LiveRamp should be working with far more companies than it currently does.
Growth since 2019:
1) Revenue - ↑ 185%
2) Customers - ↑ 27%
3) Revenue/Customer - ↑ 124%
Only the largest companies can afford that. But the real innovation in advertising is happening with smaller companies. They adopted social media first. They're early to targeted streaming. The advertisers who would benefit most from LiveRamp? Priced out.
Flashback: Small Advertisers = The Future of Streaming
What's their next act?
As we talked about last week, streaming needs 100X more buyers to hit $100 CPMs. That means LiveRamp either needs many more customers, or its existing customers need to bring scaled reach.
Cross Screen Media is an example of how this could work. We've been a long-term LiveRamp customer. Through that relationship, we've enabled thousands of political and public affairs groups to run targeted advertising, all without having a direct relationship with LiveRamp.
Tom Triscari recently published an excellent breakdown of how Publicis could tie this all together. Using LiveRamp's identity layer to connect $50B in media spend to a much larger pool of advertisers and data sources. In that model, Publicis is less of an agency and more of a toll booth. LiveRamp becomes the gate to streaming identity. Publicis just bought the road.
But Auren's question still hangs in the air. If LiveRamp only serves fewer than 1K customers at nearly a million dollars each. It's leaving the fastest-growing part of the market on the table. The companies flooding into streaming through platforms like MNTN are exactly the advertisers LiveRamp needs to reach. Whether Publicis solves that problem or makes it worse will define LiveRamp's next chapter.
Standing on the NYSE floor in 2018, I thought LiveRamp would power the TV advertising revolution. In a way, they still might. It just looks nothing like what any of us imagined.