Los Angeles Business Journal

Direct Quotes

ADVERTISING: PK4’s new ad tech eases online placement. By Subrina Hudson Monday, July 28, 2014
Connected: Founder and Chief Executive Tom Alexander at online ad company PK4 Media’s headquarters in El Segundo.

Connected: Founder and Chief Executive Tom Alexander at online ad company PK4 Media’s headquarters in El Segundo. Photo by Ringo Chiu.

Buying ads in magazines and newspapers, and, more recently, on websites had been a labor-intensive business, with teams of media buyers exchanging proposals and spreadsheets with publishers.

But as the digital ad market has boomed, what had been a business of relationships has shifted to one of algorithms, with big data replacing the big Rolodex.

Reflecting that change, El Segundo ad tech firm PK4 Media last week purchased Prosperio, a Santa Monica firm that developed a technology allowing advertisers to bypass the popular buying method of a real-time auction to purchasing ads directly from favored websites at a flat fee.

“Prosperio is helpful because a lot of the heavy lifting has been done,” said Tom Alexander, founder and chief executive of PK4, which already had a cross-platform ad buying-service called XPS. “It fits perfectly into what we’re doing with XPS, and we acquired Prosperio to be our self-service platform. So, brand advertisers or agency trading desks can come in and do the (media) buys themselves.”

Jimi Smoot, Prosperio’s founder, started the company last year and went through accelerator LaunchPad LA this year. The idea, he said, was take a mundane, repetitive process and streamline it.

“I started my career as a media buyer,” he said, “and one of the things I was surprised about was how manual the process was. To buy an ad unit on the Yahoo homepage, you had to call people. You had to send Excel spreadsheets, email back and forth.”

Terms of the deal were not disclosed, but Smoot will not be joining PK4 and it has not been determined whether any of his staff of five will make the move either. The acquisition of Prosperio marks the second time Alexander has snapped up one of Smoot’s businesses. PK4 bought Smoot’s JSFour, a media, tech and video distribution business, in 2012.

Programmatic advertising uses software that allows media buyers to automatically purchase digital advertising.

There are two primary forms of programmatic advertising. Real-time bidding, or RTB, is automated, somewhat scattershot buying and selling of online ads based on demographic criteria through an auction conducted by ad exchanges. Programmatic direct, while also automated, allows ad buyers to target the publishers of sites on which they want the ads to appear.

Shifting focus

Prosperio’s programmatic direct technology lets advertisers make guaranteed buys on specific websites. It will supplement PK4’s sales team, which works its relationships with established, brand-name digital publishers on behalf of ad agencies and advertisers.

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