Chango is purely a media play, functioning as a managed DSP and taking a margin on the media it purchased. In 2016, that strategy accounted for $41 million in gross revenue and $19 million in net revenue, a roughly 50% margin. Back in 2014, Chango posted $43 million in revenue, with data and media costs of $25 million.
Margiloff chalked up Rubicon’s divestment of the buy-side business to the difficulty of building up a two-sided market. “The hard decisions [for companies] are the focus decisions,” he said.
Although companies like Google, Facebook and AppNexus serve both sides of the market, size is key to success. “You need to have scale where one doesn’t matter over the other, and have the scale in resources to support both businesses,” Margiloff said.
Even with scale, “it creates some inherent challenges over time,” he added.
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