CEO Goel Discusses PubMatic Sell-Side Platform And Momentum

PubMaticPublisher yield management company PubMatic announced yesterday that it has seen significant growth in the past year. In a press release, the company said, “PubMatic also announced that sales revenue is up over 700% in the last year. At the same time, its reach has grown from 150 million unique users per month globally to over 360 million.” Read it.

PubMatic CEO Rajeev Goel discussed the company’s momentum as well as strategy surrounding its sell-side platform for publishers. Of the inventory managed by PubMatic, how much is guaranteed and how much is non-guaranteed inventory? How will you penetrate guaranteed?

RG: Let me start with guaranteed/direct sold inventory.  We actually don’t manage our publisher’s guaranteed inventory per se, instead we provide publishers with the audience data they need in order to sell audience-based inventory directly – and we give publishers the means to manage it themselves.

Advertisers are asking to buy audience-based advertising directly from the publishers themselves, but most publishers don’t have the ability to meet that demand.  Using audience data from multiple data providers that are partnered with PubMatic, the publisher can package their audience and sell it directly to agencies and advertisers.  It’s not unlike how the ad nets and DSPs are working with similar data providers, on the flip side, to get access to publisher audiences and sell those audiences indirectly to advertisers.

By doing this, PubMatic is helping publishers on two major fronts:

  1. Reintroducing scarcity back into the online advertising marketplace with audience-based direct sales – even through standardized ad units.
  2. We’re helping to bring more brand dollars online because brand advertisers want both audience targeting AND the guaranteed safe placement that only direct sales can provide. Through PubMatic’s platform, publishers can now provide that to brand advertisers.

Non-guaranteed advertising is obviously a major part of the publisher’s monetization strategy and we’re seeing huge growth in demand for audience targeted advertising from our DSP and ad network partners, which of course, translates into much bigger payouts for the publishers.  This is true for RTB and non-RTB based buys.

With our Sell Side Platform, we’re creating the bridge that helps publishers better manage and monetize both indirectly and directly sold inventory, while continuing to provide the greatest level of brand control available.  We’re empowering publishers on many more fronts today than we did four years ago.

Outside of the U.S., where are you seeing the greatest traction for your sell-side platform?

UK, France, Germany, Netherlands… they are all quickly growing markets.  We have built a dominant position in Western Europe based on our approach of a global platform with multi-currency support and local, in-country service.

Assuming your view that RTB is good for the publisher, why provide access to “auction[s] of real-time bidding and non-real-time bidding”?  Why not make it all RTB auctions?

We could easily give the publishers access to only real-time bidders and set a floor price if that is what they want.  But it doesn’t make sense to do that – while RTB is growing quickly, it’s less than 5% of the market today.

This is where PubMatic is fundamentally and technologically different from its competitors; our machine-learning based algorithms predict pricing from non-RTB buyers as well, so, in fact, there are far more “bidders” in our auction environment than in our competitors’.  And just because a buyer is bidding in real-time doesn’t mean that they are always willing to pay more than non-RTB buyers.  There are a lot of audience-based buys not happening in real-time.  Those bidders should be allowed to participate in the auction as well.

More bidders -> Higher bids -> Greater Publisher Ad Revenue.

RTB requires advanced technology and a significant investment in infrastructure, which all adds up to higher costs for buyers to support RTB.  So even though PubMatic is all for having as many real-time bidders as possible, the ecosystem is still years away from having 300 plus buyers that participate in real-time bidding.

By John Ebbert

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