PubMatic, the leading automation solutions company for open digital media, released its financial report for 2016, highlighting highest levels of revenue, profit and free cash flow performance in its decade-long existence. With an Adjusted EBITDA margin of 30%, the firm based in Redwood City, CA pulled a record fourth-year straight operating profitability. The latest record puts PubMatic in the top bracket of ad tech companies that enjoy the highest operating profit per full-time employee (FEE).
PubMatic secured the record profitability in 2016 owing to an increased adoption rate of its header bidding platform. Programmatic advertising will continue to expand into ad tech stack in 2017, even as PubMatic aims to enable advertisers an increased mobile and video ad monetization backed by flawless customer experience.
Header Bidding Technology and Ad Monetization Drive PubMatic’s Success
PubMatic launched its header bidding technology globally in 2012, and it now represents over 75% of all of PubMatic’s available impressions. Publishers utilizing PubMatic’s header bidding technology have often realized CPM increases exceeding 50%. Advanced mobile monetization strategies such as private marketplaces and header bidding, according to its recently released 2016 Quarterly Mobile Index (QMI), resulted in average PubMatic mobile eCPMs increasing by over 30% for mobile web and 16% for mobile app year-over-year. As such 75 % of PubMatic’s impressions were generated via mobile devices while the company realized more than 25% of marketer spend placed against video in Q4 2016.
“Our focus on sell side digital media execution enables publishers and app developers to take control of their ad decision-making. Header bidding and corresponding wrapper technology maximize the value of demand through increased access to buyers and competitive CPMs,” said Rajeev Goel, Co-Founder & CEO of PubMatic.
Renewed Commitment to Customer Satisfaction Serves Well for PubMatic
PubMatic, in late 2015, shifted its strategy toward serving premium publishers and made a renewed commitment to customer satisfaction, including implementing a quarterly Net Promoter Score (NPS) survey, a management tool used to gauge the loyalty of a company’s customer relationships. Over the course of 2016, PubMatic’s results have risen steadily, with its fourth quarter published results showing an NPS score that exceeds benchmarks for all B2B service provider categories, according to Inavero.
Goel adds, “The strategy of publishers taking back control of their assets is further supported as we see the implementation of our Unified Ad Server technology, allowing programmatic and direct sales channels to compete for access to audiences in real-time.”
During the second half of 2016, PubMatic unveiled its comprehensive revenue management platform, SEVEN, which gives publishers full control of their digital assets and provides media buyers with the ability to purchase verified audiences and premium inventory at scale across screens, channels, and formats.
As part of the SEVEN launch, PubMatic introduced its Unified Ad Server as well as OpenWrap, whereby it has made the wrapper tag that powers the company’s enterprise-grade Wrapper Solution open-source, following through on PubMatic’s commitment to promote and support transparency and fairness in the digital advertising ecosystem. PubMatic’s OpenWrap and Unified Ad Server represent the next step in the evolution of publisher ad decision-making after the rapid penetration of header bidding.
Additional Ad Tech Solutions and Collaborations
In addition to advertising automation, PubMatic also offers ad tech solutions for ad decision-making, data analytics, and quality control, apart from providing a unified ad server and Sell-Side Platform (SSP) to optimize monetization opportunities. Over the past year, PubMatic established several new partnerships around the globe, including new or expanded relationships with Gruner+Jahr e|MS, Tencent Online Media Group, Hemnet, Web Financial Group, Proxama and Mediekompaniet Adapt.
PubMatic, in conjunction with the Publisher Monetization Research Group, also launched the Japan Publisher Alliance on Digital (J-PAD), an alliance of Japanese and international publishers that allows brands to access exclusive private marketplace inventory via PubMatic’s SEVEN.
In 2016, PubMatic was named to Deloitte’s Technology Fast 500™ for the fifth consecutive year, with 236 percent revenue growth since 2012.