[Originally published in Media Village.]
Jay Sears, Senior Vice President Marketplace Development of Rubicon Project discusses ad technology and 2016 trends with Cantor Fitzgerald’s Internet analyst and Managing Director Youssef Squali.
YOUR NAME: Youssef Squali
YOUR COMPANY: Cantor Fitzgerald
YOUR TITLE: Managing Director
SEARS: What do you read to keep up with politics, art and culture?
SQUALI: Anything that could help!
SEARS: What do you read to keep up with friends?
SQUALI: E-mail, Facebook, WhatsApp
SEARS: What do you read to keep up with the advertising technology industry?
SQUALI: Very varied. Mostly companies’ and general blogs including Google, FB, AOL, RUBI, MediaPost, Business Insider and IAB.
SEARS: With regards to advertising automation, what are the three biggest trends you expect to impact companies in 2016?
- Programmatic taking over premium inventory online
- TV ad buying going programmatic
- Improved measurement/greater transparency in ad effectiveness to minimize fraud/waste
SEARS: With regards to advertising automation, what are the three most overblown topics that you wish would just go away?
- That it devalues ad inventory or applies only to remnant inventory.
- Shouldn’t be used for publishers’ most premium ad inventory.
SEARS: Tell us your coverage universe.
SEARS: The majority of ad technology companies has not performed well in the public markets. Of the poor performers, what are the commonalities between them that have contributed to this weakness?
- Disappointing quarterly performance post-IPO out of several of them, so the whole group (with a few exceptions) is in the penalty box.
- This is a convoluted segment of the industry, which remains difficult to understand for most on Wall Street.
- The belief that the largest online advertising providers, Google and Facebook, with extensive adtech stack will ultimately dominate.
SEARS: A smaller handful of ad technology companies has performed better than the rest. What are the commonalities between them that have contributed to this relative strength?
- They delivered what they said they were going to deliver and performed to or better than expectations since IPO.
- Being perceived as very focused on a particular niche or functionality of this segment, and doing it well.
- Being ultimately an acquisition target if they continue to outperform.
SEARS: Do we live in a “tale of two cities” where Google and Facebook win almost everything, advertisers are dictated to and other media companies fight for the scraps?
SQUALI: That is still generally the belief among investors and analysts. The acquisition of AOL by Verizon at 8x EBITDA speaks positively for those that are perceived to have scale and a brand like AOL within adtech. The acquisition of Millennium Media for $250M (well below its IPO valuation) speaks to the opposite.
SEARS: Please answer the following statements yes or no.
SEARS: If you could go to the airport right now with friends or family and fly anywhere in the world for vacation, who would you take and where would you go?
SQUALI: Safari in East Africa with family.
SEARS: If you could create an endowment to fund any existing non-profit you designated, what lucky non-profit organization would that be?
SQUALI: Medecins sans Frontiere
SEARS: What is your favorite restaurant in the world?
SQUALI: La Tour d’Argent in Paris!
SEARS: Thanks, Youssef!