‘Still a viable proposition’: Pubmatic CEO on plans to grow beyond a commoditized market

By Seb Joseph

Supply-side platforms have a flair for reinvention. The ad tech vendors that rebuilt themselves as transparent businesses after the ad industry’s infatuation with ad tech fees in 2018 have recently reinvented themselves as companies for marketers, not just publishers.

For some, SSPs’ resilience is explained by outward-looking opportunism in the most commoditized part of the ad tech market. Rajeev Goel, CEO of Pubmatic, said: “We’re participating in a great set of secular tailwinds that are growing the digital ad advertising opportunity, and frankly that fed into our decision on when to go public [in December].”

Pubmatic rode a rising tide in the ad tech sector throughout 2020 that saw it hit the crest of the wave at the end of the year when it floated on the stock market. The timing was vindicated in February when shares rose 63% on the back of solid earnings from its first quarter as a public traded company. Digiday caught up with Goel to hear how he plans to build on the momentum throughout the rest of 2021.

This conversation has been lightly edited and condensed.

Where is this growth coming from?

The main areas are mobile digital video, CTV and OTT. Our omnichannel video business, which covers short-form video as well as OTT and CTV, grew over 100% year-on-year in the fourth quarter. Collectively, mobile and omnichannel video grew from 52% of our revenue in the fourth quarter in 2019 to 65% in the same quarter in 2020. So there’s been a significant share shift in an overall business that grew 64% year-on-year. The other area of growth for us is supply-path optimization (SPO).

What are the biggest barriers to those prospects?

The biggest challenge in both CTV, as well as SPO, is really working through the people aspects of those shifts. In CTV, for instance, there are digital buyers and TV buyers who come at the trend with different perspectives when it comes to how they measure, attribute success and the workflows they like to use to get those insights. Working through that takes time. On SPO, it takes time to put deals in place with agencies. Once we have a deal done, we’re not done because it needs to be activated. We have to then link up with the various operating teams in different markets covered by the deal. These things take time.

Why has SPO become so important for the business?

Over 20% of the ad buying on our platform in the fourth quarter came from SPO agreements, compared to around 10% for the first quarter. We’re in the early stages of SPO where the market still mainly revolves around the early adopters. The deals we’ve done have tended to be regional in nature, or partial in the sense that it’s around a certain ad format. As the benefits of these deals, we see people trying to scale them. But these deals can take quite a while to implement even after the deal is in place. A lot of our activity in this area last year …read more

Source:: Digiday