The 13-year-old ad platform company has hired Bob Walczak, VP product at PubMatic, to oversee BidSwitch, its ad exchange-like product.
At IPONWEB, Walczak will run sales and business operations for BidSwitch, a fairly new piece of technology (rolled out in 2013) that connects supply and demand sources. Its 100 customers are mostly in Europe, but the company wants to promote the product more aggressively in the US.
What is BidSwitch? Here's IPONWEB in its own words:
"Unlike an exchange, BidSwitch operates as a transparent middleware layer, intelligently routing and filtering the bid stream to ensure that buyers and sellers have access to as much (or as little), non-fraudulent supply and demand as they require."
In other words, companies that have an existing bidder technology must invest the time to connect the tool to multiple sources of supply. This has come to be seen as a waste of effort. Why bother with 10 integrations when everyone else is doing the same thing?
IPONWEB has firsthand knowledge of this, since it has been in the business of building bidder technology for years.
"We realized a couple years ago it's getting more difficult to get integrations in the ad tech ecosystem," said Boris Mouzykantskii, IPONWEB's founder and CEO. "It used to be I could get an integration to OpenX or MediaMath in a week or two weeks. If you're trying to integrate with them today it's not at the top of their priorities."
But IPONWEB is not first to this idea; how can it hope to compete with the scaled supply integrations supported by large exchange players? The short answer is price. Sources say IPONWEB charges just 5% per media transaction enabled by its technology, compared to an estimated 10 to 15% charged by some other players such as AppNexus and Casale Media.
IPONWEB says it plans to increase investment in the product. Given Walczak's long experience in cross-device tracking, those investments are sure to incorporate mobile considerations. Walczak founded mobile identification firm Ringleader Digital, among the first so-called "device fingerprinting" vendors singled out several years ago in The Wall Street Journal's "What They Know" series. And he was initially hired by PubMatic to focus on its mobile products.
Over the long haul, building connections between a wide range of cross-platform supply sources is bound to come with advantages and could put the company into direct competition with today's established ad exchanges.
"In a world of cross-device, the person that's able to map the world together is certainly in a valuable position," said the IPONWEB customer. "Part of being able to run BidSwitch is creating a very large map of who's who so you can route everything."
Slow And Steady
Of course BidSwitch is just one of IPONWEB's business units, and not the largest.
The privately held company has grown organically over the years, achieving consistent profitability without relying on outside investments. While the company does not disclose revenues, it said revenue growth is in keeping with the broader market. That stands to reason since the company works with a cross section of media and advertising stakeholders, including SSPs, DSPs, publishers and marketers.
On the platform side of its business (i.e., not BidSwitch), where it builds and licenses technology to a group of mostly demand-side customers, IPONWEB has about 50 clients globally in a mix of display, mobile, email and video ad channels.
"Our core value proposition used to be and to a large extent still is building custom ad systems," Mouzykantskii told AdExchanger. "Over the past five years, those systems have gotten more complicated, but we're all right, complexitywise. Where we need to excel is selling them, advising about them and consulting on them."
IPONWEB is most famously known as the company commissioned by Right Media's founders to help build their proto-ad exchange. That was essentially a work-for-hire project, with an ongoing consulting contract that lasted for some time after Yahoo acquired Right Media. In ad tech circles, "Boris" is often referred to knowingly as one of the early architects of real-time bidding.
Since those days, IPONWEB has migrated to licensing-plus-services model. It no longer works by the hour, or transfers intellectual property to its clients. Rather it makes its DSP pipes available to customers, an increasing number of whom are "principals" (advertisers or, in some cases, agencies, rather than ad networks or other intermediaries).
Nathan Woodman, GM of demand solutions, self-deprecatingly described the company's platform this way: "It's a very dumb scalable system that is devoid of intelligence and logic. It's a framework. We have to integrate it and turn it on. All the data that's generated is in the client's first-party domain. Customers own the business logic and rules."
With the close timing of its latest hires, IPONWEB seems ready to tackle the US market in a bigger way.
"We're a largely European company, strong also in Japan. Hiring smart guys in the US is important," Mouzykantskii said.