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What GumGum’s Valuation Means for the Future of Ad-tech

The contextual ad-tech company raised $75 million in new funding from Goldman Sachs
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GumGum

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GumGum is swimming in gold. The contextual ad-tech company raised $75 million in new funding from Goldman Sachs earlier this week, putting its valuation north of $700 million.

While ad-tech companies scramble to find targeting alternatives in the face of the coming “cookiepocalypse,” GumGum’s solution (without relying on Apple or Google's sweet, sweet supply of personal information) uses AI and screen scanning to match advertisements with all aspects of content—from text to sentiment to frame to audio, and all points in between, according to the company’s CEO, Phil Schraeder.

“We have to come to the realization as an industry that premium pricing means you're actually processing and looking at all those pieces of content,” Schraeder told Marketing Brew. “Contextual [advertising] is one of the tried and true ways that respects a person, their privacy and their data.”

Contextual advertising has its skeptics. According to a Lotame report, a nice 69% of marketers are confident contextual advertising could replace targeted marketing.

But, most will still spend on first-party data, according to another report by the Interactive Advertising Bureau.

  • Only 24% said they’d invest in contextual advertising.

GumGum, whose clients include Jeep, Clorox, and Unilever, aims to convert those skeptics by establishing benchmarks for contextual advertising as an industry.

Schraeder said his company will use this cash injection to buy “companies that are complementary” to what it’s currently doing (i.e., more contextual ad shops), which will beef up its own “solutions” while also expanding and offering its services globally.

“[The industry is] running to find a solution with cookies going away; everything’s on fire in the barn,” Schraeder said. “Where there is personal data being hidden or masked anonymously, there's someone that can find a way to get it.” — RB

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Marketing Brew informs marketing pros of the latest on brand strategy, social media, and ad tech via our weekday newsletter, virtual events, marketing conferences, and digital guides.