PubMatic (PUBM), the supply side programmatic ad partner for publishers, just held its first earnings report yesterday after going public at the end of 2020 and they crushed it: 64% year-over-year revenue growth with a staggering 47.9% margin (a 190% increase YOY). They are onboarding new clients, growing ad buys from existing ones and utilizing their extensive infrastructure built from 14 years of being in business to maximum effect. All eyes will be on Magnite (MGNI) after the market closes today for their earnings report, which if solid (as is expected) will confirm that we are officially in the midst of a massive shift in how advertising spend is allocated. The Trade Desk’s (TTD) Jeff Green has been almost oracle-like over the years predicting this transition, and now it seems we’ve arrived at the inflection point.
Advertising will eventually become a $1T+ business worldwide with an increasing amount of that pie being transacted programmatically. The estimate is that one day in the near future all digital advertising will be conducted within the programmatic ad exchange, as brands/agencies will demand transparency, proof-of-performance and the ability to safely target-market without the risk of supporting uncertain USG (user generated content: Facebook et al). So, as a relatively nascent industry, this is a great time to invest for retail folks. Unfurl the sails and catch those trade winds!
“I try all things, I achieve what I can.”- Herman Melville, Moby Dick