Home Online Advertising IAB Marketplace: Programmatic Gains Interest From Investors, Too

IAB Marketplace: Programmatic Gains Interest From Investors, Too

SHARE:

Internet business models have been turned upside down and ad-tech is no exception remarked Youssef Squali, global head of Internet media equity research for Cantor Fitzgerald, during a speech at today’s IAB Advertising Technology Marketplace in New York City.  As a result, he sees this disruption enabling faster, cheaper processes and ultimately, better pricing – a notion well-understood among event audience members who primarily hailed from ad tech companies.

To prove his point on disruption, he referenced examples of players that remade markets such as Amazon with commerce, Google with lead-generation and, of course, search and Airbnb for Travel  – all have some semblance of automated price discovery that enables unlimited scale.

Real-time bidding (RTB), which is forecasted to represent roughly $3.5 billion of digital display ad business in 2013, is grabbing the attention of Wall Street investors. Though RTB still represents less than 20% of domestic display spend, according to eMarketer estimates, investors are watching how “automation is transforming the way ads are bought and sold, enabling price discovery and scale that never existed before,” Squali said.

He thinks the space is “still very hot” from an investment point-of-view.   Squali noted that through 2017, RTB is forecasted to experience 34.3% compound annual growth that will outperform the projected 11% growth rate of the Internet as a whole.

Discussing what he called the “Cantor Internet Index,” an in-house company rating tool, to “spot the next Amazon and Google,” he said that not many “segments in the market are growing 30-plus-percent per year,” but programmatic buying is.  Yet, despite the projected growth of programmatic and RTB,  he thinks growth comes with inherent challenges.

At the root of the problem is the fact that “this is still a very convoluted space” with no shortage of layers and nuances that exist between advertisers and publishers, Squali argued. He thinks consolidation in the market is bound to heat up. And, because of the proliferation of smaller players and point solutions, it’s pertinent for those smaller players to educate investors and clarify their story, which “will impact your valuation.”

As larger players build out their tech stacks, niche and point solutions will be acquired or wither away, Squali predicted. Google is currently in the lead with its full-service stack, but Facebook’s FBX will “likely be another big beneficiary.” The key for the point-solution player is to achieve scale – fast – or risk being eliminated as winners emerge.

“In time, (RTB) will allow the sale of premium display, video, and mobile (inventory).. and, frankly, whatever else comes down the pike,” Squali noted. However, there are “a lot of technical issues to be resolved and clearly, a lot of inventory management and personnel decisions to be made before RTB enters prime time.”

Must Read

play button with many coins isolated on blue background. The concept of monetization of the video. Making money on video content. minimal style. 3d rendering

Exclusive: Connatix And JW Player Merge To Create A One-Stop Shop For Video Monetization

On Wednesday, video monetization platforms Connatix and JW Player announced plans to merge into a new entity called JWP Connatix. The deal was first rumored in July.

HUMAN Raises $50 Million

HUMAN plans to build a deterministic ID from its tracking of more than 20 trillion digital signals per week across 3 billion devices, which will aid attribution for ecommerce.

Buyers Can Now Target High-Attention Inventory In The Trade Desk

By applying Adelaide’s Attention Unit scoring, buyers can target low-, medium- and high-attention inventory via TTD’s self-serve platform.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters

How Should Advertisers Navigate A TikTok Ban Or Google Breakup? Just Ask Brian Wieser

The online advertising industry is staring down the barrel of not one but two potential shutdowns that could radically change where brands put their ad dollars in 2025, according to Madison and Wall’s Brian Weiser and Olivia Morley.

Intent IQ Has Patents For Ad Tech’s Most Basic Functions – And It’s Not Afraid To Use Them

An unusual dilemma has programmatic vendors and ad tech platforms worried about a flurry of potential patent infringement suits.

TikTok Video For Open Web Publishers? Outbrain Built It.

Outbrain is trying to shed its chumbox rep by bringing social media-style vertical video to mobile publishers on the open web.