TEGNA’s Premion Acquires Next-Generation DSP Octillion Media to Expand CTV Advertising Capabilities

Rhea-AI Summary

TEGNA Inc. (TGNA) announced the acquisition of Octillion Media by its advertising platform Premion, expanding its capabilities in the local CTV/OTT advertising space. The acquisition is expected to drive accelerated growth and improve operational efficiencies for TEGNA. The transaction is not expected to have a material impact on TEGNA's 2024 financials.

Insights

Market Research Analyst

The acquisition of Octillion Media by TEGNA's Premion represents a strategic move to bolster its position in the Connected TV (CTV) and Over-the-Top (OTT) advertising market. This sector has been expanding rapidly, with advertisers increasingly allocating more budget towards CTV/OTT due to higher engagement rates and targeted delivery capabilities. By integrating Octillion's demand-side platform, Premion aims to enhance its local advertising solutions, which could potentially increase its market share and revenue streams.

From a market perspective, this acquisition could signal TEGNA's intent to become a more dominant player in the local CTV/OTT space. It is critical to observe how this move will influence Premion's competitive edge, especially against larger national platforms. The focus on local advertising is a key differentiator that may appeal to regional advertisers seeking more personalized and geographically relevant ad placements.

Financial Analyst

Financially, TEGNA's acquisition of Octillion Media is structured to be minimally disruptive, utilizing existing cash reserves which indicates a prudent approach to capital allocation. The statement that the transaction will be free cash flow and EPS accretive within 12 months is particularly noteworthy for investors, suggesting an expectation of a positive return on investment in a relatively short period. However, it is essential to monitor the actual performance against these projections, as acquisitions can entail integration risks and unforeseen expenses.

TEGNA's reassurance that the acquisition will not materially impact its cash or leverage levels is a positive signal to stakeholders concerned about financial stability. For long-term implications, the success of this acquisition will likely depend on how effectively Premion can integrate Octillion's technology to drive product innovation, operational efficiencies and ultimately, enhanced profitability.

Advertising Technology Expert

The importance of brand safety, transparency and quality in advertising cannot be overstated in today's market, where consumers are increasingly aware of and sensitive to these issues. Octillion Media's achievement of the TAG Certified for Transparency Seal suggests a strong alignment with these values, which can be highly attractive to advertisers who prioritize trustworthiness in their partnerships. This alignment could strengthen Premion's value proposition to its clients.

Moreover, the technological implications of combining Octillion's local-focused demand-side platform with Premion's existing offerings could lead to innovative product developments in the CTV/OTT space. The ability to provide quantified business outcomes for advertisers is a significant competitive advantage, as it addresses the industry's demand for measurable ROI on ad spend. The success of this integration will likely hinge on how seamlessly the technologies and teams can be combined to deliver on these promises.

TYSONS, Va.--(BUSINESS WIRE)-- TEGNA Inc. (NYSE: TGNA) today announced that Premion, LLC, its industry-leading premium Connected TV (CTV)/Over-the-Top (OTT) advertising platform for regional and local advertisers, has signed an agreement and simultaneously closed on the acquisition of Octillion Media. Octillion is a next-generation demand-side platform (DSP) focused on Local CTV/OTT advertising. The acquisition will expand Premion’s capabilities in the growing CTV marketplace by combining Octillion’s cutting-edge technology with Premion’s award-winning local CTV/OTT advertising solution.

“Octillion is precisely the type of smart bolt-on acquisition we have long considered to accelerate our already successful organically grown Premion business,” said Dave Lougee, president and CEO, TEGNA.

“We are thrilled to announce the acquisition of Octillion Media,” said Tom Cox, president of Premion and senior vice president, corporate development, TEGNA. “We built Premion with a local-first mindset from the start. The acquisition of Octillion Media provides us with a proven purpose-built local CTV platform to further enable product innovation, improve operational efficiencies, and drive accelerated growth. Local relevance remains a top advertiser priority, and the addition of Octillion’s technology will enhance our ability to meet ever-evolving customer needs and drive value for our clients.”

Founded in 2019, Octillion Media’s technology platform has been natively developed for local CTV/OTT advertising. Named the #2 fastest growing private media company in the U.S. on Inc.’s 5000 in 2022, Octillion has experienced impressive growth by delivering innovative CTV/OTT solutions with a focus on advertiser results and transparency. In 2023, Octillion was the first local OTT platform to achieve the TAG Certified for Transparency Seal.

“With our shared belief that transparency, quality, and brand safety are the key pillars of success for local CTV advertisers, bringing Octillion together with Premion is a natural fit,” said Gabe Greenberg, CEO and co-founder of Octillion. “We’re excited to continue to build and develop our innovative CTV/OTT product offering and activate the platform’s capabilities backed up by quantified business outcomes across Premion’s network of sellers and clients.”

As part of the transaction, Gabe Greenberg, as well as Octillion’s employees based in the U.S. and internationally will join the Premion team.

TEGNA will cover the cost of the acquisition with available cash on hand, which will not have a material impact on TEGNA’s cash or leverage levels. The transaction is expected to be free cash flow and EPS accretive within 12 months and is not expected to have a material impact on TEGNA’s 2024 financials.

About TEGNA

TEGNA Inc. (NYSE: TGNA) is an innovative media company that serves the greater good of our communities. Across platforms, TEGNA tells empowering stories, conducts impactful investigations and delivers innovative marketing solutions. With 64 television stations in 51 U.S. markets, TEGNA is the largest owner of top 4 network affiliates in the top 25 markets among independent station groups, reaching approximately 39 percent of all television households nationwide. TEGNA also owns leading multicast networks True Crime Network and Quest. TEGNA offers innovative solutions to help businesses reach consumers across television, digital and over-the-top (OTT) platforms, including Premion, TEGNA’s OTT advertising service. For more information, visit www.TEGNA.com.

About Premion

Launched in 2016 by TEGNA Inc. (NYSE: TGNA), Premion is an industry-leading premium CTV/OTT advertising platform for regional and local advertisers. Gray Television, Inc. acquired a minority stake in Premion in 2020. With directly sourced inventory from 125+ premium publishers, Premion delivers transparency and brand safety, making it easy for advertisers to target and reach engaged audiences at scale. A 14-time CTV industry award-winner, Premion was recognized in 2023 with the Advanced Advertising Innovation Award for Best Use of Data, the Cynopsis Measure Up Award for Outstanding Brand Safety Strategy, and the ITVT Award for Achievement in Advanced Advertising. In 2022, Premion won the Cynopsis Model D Awards for Outstanding Local Advertising Solution and the Best of the Best Award for Best Ad Tech Solution. The Company has earned the TAG Certified Against Fraud Seal and the TAG Brand Safety Certified Seal from the Trustworthy Accountability Group (TAG). For more information, visit www.premion.com.

About Octillion Media

Founded in 2019 by Gabe and Tina Greenberg, Octillion was purpose built to support streaming advertising for local and mid-market advertisers. Octillion is a platform as a service company (PaaS) powering the planning, buying, attribution and optimization tools for local and mid-market advertisers and agencies utilizing their proprietary tech stack. As the first and only TAG/TrustNet certified transparent CTV/OTT solution for local advertisers, Octillion’s technology stack is founded on the principles of data and transparency powering the future of local advertising for video, CTV, audio, digital, DOOH and more.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240201213963/en/

For media inquiries, contact:

Anne Bentley

Vice President, Chief Communications Officer

703-873-6366

abentley@TEGNA.com

For investor inquiries, contact:

Julie Heskett

Senior Vice President, Chief Financial Officer

703-873-6747

investorrelations@TEGNA.com

Source: TEGNA Inc.

FAQ

What did TEGNA announce regarding Octillion Media?

TEGNA announced the acquisition of Octillion Media by its advertising platform Premion.

What is the ticker symbol for TEGNA Inc.?

The ticker symbol for TEGNA Inc. is TGNA.

What is the expected impact of the acquisition on TEGNA's 2024 financials?

The acquisition is not expected to have a material impact on TEGNA's 2024 financials.

How will TEGNA cover the cost of the acquisition?

TEGNA will cover the cost of the acquisition with available cash on hand.

What is the expected impact of the acquisition on TEGNA's free cash flow and EPS?

The transaction is expected to be free cash flow and EPS accretive within 12 months.