September 3, 2014 – We recently spoke with some of the big players in ad tech and asked them to share their thoughts on the hottest companies in the industry right now.
MediaMath, a demand side platform, or DSP, was one name that kept coming up. The company provides advertisers and marketers with tools to buy ads online through a single interface.
CEO Joe Zawadzki founded MediaMath in 2007 and launched the first DSP that same year.
He was already deeply embedded in the industry; he co-founded [x+1] in 1999 and served as the company’s president and chairman.
Zawadzki’s two fellow MediaMath co-founders, Erich Wasserman and Greg Williams, also worked at [x+1] where they launched the company’s media division.
Zawadzki left [x+1] because he wanted to create something new.
He compared it to the story of Michelangelo and his masterpiece, the 17-foot marble statue of David. When Michelangelo finished his David statue, the Pope asked the artist how he knew what pieces of marble to chip away. Michelangelo says “It’s simple. I just remove everything that doesn’t look like David.”
Zawadzki notes in an email that the reference may seem “vainglorious,” but explains that when he left [x+1] he did so because the company “wasn’t raw block of stone anymore.”
Making the jump to MediaMath meant he and his other cofounders needed to “cut away anything that didn’t look like David and acquired the things that had David-like features to construct it,” which would help them create software that they felt advertisers and marketers actually needed.
There was another, perhaps less artistic reason. Zawadzki saw big money moving in the ad tech industry in 2007.
“Over $10 billion of market value changed hands in three months — all on the tail of big media companies getting serious about using technology in their media monetization,” Zawadzki says.
In 2007, Google bought DoubleClick for $3.1 billion, Yahoo acquired all of Right Media, and companies including BlueKai and eXelate launched their own ad tech services. It seemed, to Zawadzki, that it was the opportune time to launch MediaMath and show people that the company’s DSP technology could make the ad industry more efficient.
DSPs buy ad space on behalf of advertisers and marketers, programatically. They can help advertisers monitor live campaigns or set campaign parameters, among other things.
When you’re online and you see an ad, chances are an auction just took place within fractions of a second to place that ad. The publisher reaches out to companies like MediaMath and alerts them that an ad slot is available. DSPs can then bid on that space, based on data they have about the user: what websites they’ve visited recently or what they’ve clicked on.
Today, there are a handful of major companies that fit in the DSP “bucket,” including Turn, DataXu, as well as some smaller companies. MediaMath is arguably one of the fastest growing “DSP” companies, however, and they are looking to expand more globally after opening an office in Paris earlier this year.
MediaMath says its sales reached $311 million last year, up from $135 million the year prior. It has been profitable in the last year as well, with earnings of $14 million in 2013 before taxes or interest — up from $0.6 million in 2012. It also raised over $175 million in funding, bringing in $73.5 million in Series C funding in June.
“They have managed to evolve with the changing scope and demands of the programmatic marketplace both through technology innovation as well as through strategic partnerships. They know what their core strengths are and seek to excel in those areas,” Scott Ferber, CEO of Videology, says of MediaMath. “At a time when there’s the temptation to be everything to everyone, I believe clients appreciate that type of focus and transparency.”
Some speculate MediaMath could be one of the next ad tech companies to go public, but the current state of public ad tech companies and their performance in the stock market could change things. Although, with video ad company TubeMogul reporting better than expected Q2 earnings, there’s something to be said for the potential power of the ad tech business on Wall Street.
Zawadzki’s team more than doubled in size in the last year, now with close to 500 employees. MediaMath plans to move buildings next summer and will take over three floors in 4 World Trade Center.
If MediaMath can pull this off it will not only make things easier for marketers, looking to track potential customers and serve them with the most relevant ads to increase conversion rates over time, but it may also mean an IPO for the company in the near future.