Once thought of as somewhat of a failed experiment, private ad
exchanges are undergoing a revival. Programmatic spending is
increase nearly 74% this year, according to eMarketer, and publishers are trying to
capture chunks of that growing pie by packaging programmatic buys
with ads they sell to advertisers directly.
Last month, for instance, News Corp.
set up its own private exchange, deeming it the best way to
meet the growing demand for automated buying while not
cannibalizing its premium inventory.
"As direct sales become more and more transacted through real
time bidding and audience targeting methods demanded by
advertisers, publishers are moving more and more of their inventory
into our platforms." said Rajeev Goel, co-founder and CEO of
PubMatic in an interview with Ad Age.
To keep up with the demand, PubMatic is expanding its current
staff of 350 by nearly a third. The company will also open four new
offices, and set up three new data centers. In all, the total
investment will reach $10 million dollars.
According to Mr. Goel, PubMatic, founded in 2006, is using funds
generated by its business to finance the growth. The company, he
said, has seen sales of private exchange inventory jump from 1% of
its business at the beginning of the year to 10% today. Mr. Goel
would not say whether or not the company is profitable. PubMatic
has raised a total of $63 million since it was founded in 2006.
For ad-tech companies, a spike in sales and marketing spending,
which Mr. Goel said will make up half the additional headcount, can
often precede a filing to go public. When asked if PubMatic is
itself preparing to IPO, Mr. Goel did not shy away from the
"We feel, looking at some of the recent IPOs, that we would fare
favorably in an IPO scenario," he said. "We haven't made any
decision at this time of when we might do that and what the
specific timing of that would be."