Integral Ad Science goes public amid Google-spurred adtech stock surge
Integral Ad Science (IAS), an adtech company specializing in ad verification, has announced share pricing for its initial public offering today. Its debut on the trading floor follows a flurry of bullish bets on adtech stocks — including The Trade Desk, Magnite, LiveRamp and Criteo — following Google’s Thursday announcement that it would be delaying the deprecation of third-party cookies until 2023. Here’s what marketers need to know.
Integral Ad Science kicked off trading today with shares priced at $18 each
● IAS uses its dataset of more than 100 billion web transactions daily to authenticate and secure digital ads and ensure ads are viewed by real people rather than bots. It works with over 2,000 brands and publishers worldwide.
● The company has fared well this year, as remote-first companies seeking to recover Covid-induced losses invested more money in digital advertising. It garnered $240.6m in revenue for 2020, growing at 13% and saw a 28% adjusted EBITDA.
● Plus, market trends indicate that the company is likely to continue its growth pattern: digital ad spend is projected to surpass $455bn this year — up from just over $378bn in 2020, per a recent eMarketer report. The influx in ad spend is likely to create more business for IAS.
● The company says its current implied valuation sits around $2.4bn.
● Today the company began trading on Nasdaq under the symbol “IAS,” offering 15m shares of common stock priced at $18 apiece.
● The offering is set to close on July 2, but underwriters of the IPO have a 30-day window in which they can purchase up to 2.25m more shares.
● Gross proceeds from the IPO are expected to reach about $270m. The company said in a statement that it “intends to use the net proceeds from the offering to repay a portion of IAS's borrowings.”
Why it matters
● IAS research suggests that connected television (CTV) viewership is on the rise — which will create additional ad inventory and may also increase demand for ad safety and verification solutions like those offered by IAS.
● Further, with the impending deprecation of the third-party cookie, many experts predict that contextual targeting approaches — where a message is placed automatically based on correspondingly relevant digital content — will see increased adoption over the next year or so. IAS sees the trend toward contextual as a valuable opportunity to grow its business, as contextual ads will require validation and safety measures.
● Importantly, Google announced last week that it would be postponing the scheduled sunsetting of the third-party cookie. Advertisers and publishers will now have until mid- to late 2023 before cookies are no more. In response to the announcement, adtech stocks spiked. IAS, too, may benefit from the reactionary activity.
● “Together, the growing need for our solutions across social platforms and connected TV, as well as the demand for more sophisticated contextual targeting tools, are tailwinds for our business,” the company’s chief executive Lisa Utzschneider tells The Drum. “Our IPO offers an opportunity to continue to innovate when it comes to building out our technology and investing in exceptional talent, including engineers. We will continue to offer sophisticated tools for advertisers and publishers to navigate the future of digital media quality.”