Following the IPO -- and the lifting of Rubicon’s “quiet period” -- I asked Addante a few questions about his stock exchange experience. In particular, what he planned to do with all the public capital he’s raising, and equally importantly, what it was like for him to be standing in the hub of Wall Street’s exchange infrastrastructure and what it made him think about Madison Avenue’s?
“It was pretty neat to be in the New York Stock Exchange building and to see how it works,” Addante admitted, in decidedly unconventional CEO parlance.
His biggest epiphany, he said, was looking around at all the stock market action, and thinking, “There’s a lot of inventory moving around in here, but they weren’t using a lot of automation to do it.”
Addante has long held a belief that the programmatic ad industry’s technology and trading systems may actually be more sophisticated than the financial industry’s. Partly, that’s the cultural legacy of Wall Street’s manual trading roots, and the fact that Madison Avenue effectively leap-frogged that with seach, display and now video, and soon other major media. “But if automation is going to replace people, then it’s going to replace them on Wall Street, too,” he quipped -- to RTM Daily, if not his hosts and underwriters on Wall Street.
Another thing that struck Addante was how concentrated the stock exchange’s data centers were, and the fact that he’s starting to see the same trend taking place in the programmatic advertising marketplace, with “a lot of buyers and bidders putting their hardware into the same data centers, so they can improve the connection speed and decrease the latency” of their trades. That’s not just true of the open RTB marketplace, but of the increasing number of private exchanges being set up through Rubicon and other facilitators.
In terms of Wall Street’s positive reaction to Rubicon’s IPO, Addante says it is just another form of financing to help fulfill its mission of automating the process of trading advertising inventory, and it’s initial market valuation -- roughly $800 million -- isn’t a bad start when you consider the size of the market companies like Rubicon are enabling. Addante pegs it at $100 billion, which is a huge jump over the roughly $13 billion he estimates is currently being traded programmatically. The growth, he says, will come from organic growth in online display, video and mobile, as well as the expansion of traditional media -- TV, print and out-of-home -- into the programmatic marketplace.
“Our vision is to automate all advertising starting with digital,” he said. Adding the $100 billlion figure assumes just half of total ad volume will be processed programmatically in the near future, which you know, is also Interpublic’s Mediabrands’ goal.