Web video advertising firm Videology said Monday it hired a new chief financial officer with experience preparing companies for public stock offerings, a signal the Baltimore-founded company may soon follow through with plans for an initial public offering.
Kenneth Tarpey, most recently CFO at comScore Inc., joins Advertising.com co-founder Scott Ferber on Videology's executive team. Tarpey managed the finances of two companies that went public in the 1990s before leading publicly traded comScore for five years until retiring in August.
Founded in Baltimore as Tidal TV in 2007, the company narrowed its focus to strictly advertising and rebranded as Videology in 2012. It moved its headquarters to New York in August, but still has about 150 employees in Locust Point, with 50 employees in New York and another 150 around the country and globe.
As the online video advertising market continues to grow, Videology is looking for deeper pockets to fuel its expansion.
The hiring signals an IPO could be ahead in the second or third quarter of 2015, as it typically takes that long for a new CFO to prepare a company's books for the scrutiny of investors and the Securities and Exchange Commission, said George Nemphos, a Baltimore attorney with the firm Duane Morris who advises companies on IPOs and mergers. Nemphos does not work with Videology.
"With the way the market's coming back, it might be good timing," he said.
The stock market is increasingly warm to companies seeking initial public offerings, with more than 250 IPOs in the U.S. so far this year, 24 percent more than this time last year, according to Renaissance Capital. In September, Chinese e-commerce firm Alibaba set a new IPO record, with its $25 billion sale the biggest ever.
Recent IPO filings are heavy on biotechnology and pharmaceuticals, as well as real estate. But technology companies could be on the rebound, Nemphos said.
Online video advertising is growing rapidly — faster than TV advertising — but its growth rate is expected to moderate over the next several years, according to research firm eMarketer. Digital video ad spending in the U.S. is expected to hit nearly $6 billion this year, up 56 percent from 2013, and reach $12 billion by 2018, according to eMarketer.
That compares with $69 billion being spent on TV advertising this year, and $79 billion by 2018.
Videology sells technology that helps advertisers manage video campaigns run across websites and in smartphone and tablet applications, tailoring them to particular demographic groups and tracking sales they drive.
It is a model born out of Advertising.com, which introduced advertising priced per click, and carried over to other mediums since. Millennial Media, founded by other Advertising.com alumni, applied it to smartphone and tablets and raised $152 million in a March 2012 IPO. Its shares have since lost more than 90 percent of the value of their IPO price, closing at $1.89 on Monday.
Ferber, along with brother John Ferber, sought to take Advertising.com public before it sold to AOL for $435 million in 2004.
Ferber, who was not available for comment, said in a statement that Tarpey's hiring and other executive moves allow him to focus on "conveying our value proposition to the marketplace."
Scott Macleod, the company's current CFO, will step aside to oversee day-to-day operations as president, with Ferber remaining as CEO.
"In particular, his experience and stewardship of successful, publicly traded companies, especially in the digital media space, will be invaluable as Videology anticipates our future opportunities including a potential initial public offering," Macleod said of Tarpey.
Tarpey has spent much of his career in media and video technology. Videology officials said that while at comScore, which tracks consumer behavior digitally, he fostered relationships with investors that helped grow the company's market capitalization more than two and a half times over. Before that, he was chief financial officer at ObjectVideo, a venture-backed company that sells video surveillance software.
He managed the finances for two companies that went public in the tech boom of the 1990s, SQA Inc. and Proxicom.