Advertising
- Adtech firm PubMatic is building a new ad product that's meant to help publishers sell ads in streaming TV apps and take on the merged Telaria and Rubicon.
- PubMatic is one of many adtech firms looking to capitalize on the shift of ad dollars from linear to over-the-top television.
- As privacy laws like California's Consumer Privacy Act and tech companies like Google clamp down on third-party data, PubMatic is also pitching publishers software that targets ads using IDs instead of cookies.
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Adtech companies are clamoring for a piece of connected-TV advertising.
PubMatic, an adtech firm that helps publishers sell programmatic advertising, is now working on a product to help them capitalize on the rise of connected TVs while taking on rivals Telaria and Rubicon.
PubMatic has a 40-person team - half of whom are engineers - building an OTT product that it plans to roll out in the first half of this year, CEO Rajeev Goel said. Goel wouldn't name any publishers that committed to it, but said the product is aimed at publishers that distribute content through apps on ad-supported streaming platforms like Roku, Amazon Fire and Sling TV.
PubMatic made more than $100 million in 2019, with more than half of its business coming from mobile advertising. Thirty percent came from text-based display advertising and 20% from video. Goel said the firm wants to increase the video portion to 30% this year.
Goel said PubMatic wants to solve issues like frequency capping, which happens when the same ad is repeatedly served; and advertisers having their ads run too close to a competitor's. The idea is to use header bidding technology, a popular advertising tactic that allows multiple ad buyers to bid on web ad space at the same time, to OTT apps.
"We think there's a huge opportunity to bring header bidding into the CTV market," he said. "The big challenge is, how do you bring a TV-like experience into streaming?"
Redwood City, Calif.-based PubMatic also opened an office in Los Angeles to be closer to entertainment publishers and hired former Telaria exec Craig Berlingo to head up its OTT work, Goel said.
As cord-cutting and the number of new streaming services grows, firms including Innovid, TripleLift and Telaria are also shifting their business models from ones based around display advertising to ones focused on connected TV. This year, Telaria and Rubicon Project are expected to merge to scale the amount of OTT content that publishers can monetize.
Goel described PubMatic's upcoming OTT product as a direct competitor with Telaria and Rubicon.
PubMatic is trying to plan for the death of cookies
PubMatic is also adapting to data and privacy changes. California's Consumer Privacy Act and Europe's General Data Protection Regulation make it harder for marketers to use people's data to pinpoint them with ads. Google and Apple have clamped down on the use of third-party cookies in browsers.
As an alternative to cookies, a handful of adtech companies like LiveRamp, The Trade Desk, Britepool and ID5 are building ID products that stitch together audience data for advertisers. IDs store information like geography and browsing and let advertisers pass that information to publishers and adtech companies without using cookies.
PubMatic is pitching publishers on software that it says pulls in all of those IDs and can be used to help advertisers serve privacy-friendly ads.
Goel said both new products will help PubMatic survive the ongoing adtech consolidation. Advertisers are paring the number of adtech firms they work with, making it hard for adtech companies to get profitable or raise money. Marketers are also demanding more transparency from adtech companies about the fees they charge.
"All of these things are creating significant costs to operate and also barriers to entry," Goel said. "In an environment where marketers are pushing for more transparency, costs going up and compliance and regulation, we're clearly seeing consolidation."