Bronte Media

Spotrunner is a company with a very good basic premise: It’s hard to buy Television advertising if you are a small company. But separating out the idea from the company, I will not be surprised to see if the company bombs.

Venturebeat reports the company is raising another big round at a large valuation. Things going swimmingly right?

Every person I ask about how the company is going gives me a sly shrug. That there is something below the surface. They have raised roughly $50m so far, including a monster $40m round from every media dog and his mother.

Something about their progress just doesn’t pass the smell test, though. There is of course the fact that Lachlan Murdoch invested (who is not his Father’s son in media ways). There is the news that Joanne Bradford joined. And now, per the Venturebeat article, the news “that early investor Battery Ventures has proposed to sell a portion of shares — enough so that it will reap the full amount of its original investment plus a small profit.”

Zooming up to 40,000 feet, what is wrong with the company? There are two basic barriers/problems to the business:

1) It’s an ad network. You don’t own the viewer and the networks choke and dribble inventory they deem OK for you to sell. You get a small share of the revenue which gets ever smaller with scale (see case study in ad network economics, Overture before it was sold to Yahoo).

2) It’s really hard to make TV ads. Sure you have stock videos that can be tailored. The reason why search ads and not display took off in a self service way was that it is easy to create a text ad. Creating a rich media banner is harder. And creating a 30 sec TV spot is even harder. I know this is the central premise of the compay: To make this step dead easy. But even with the cost of video equipment and editing plummeting, it’s still a lot harder for people to be creative. That is, a few lines of text fine; 30 seconds of Ridley Scott inspired creativity, not so much.