Inc. Mag’s Revenue Survey Points To The Maturing Of The Programmatic Market

Inc. Magazine released its annual 500/5000 revenue survey on Wednesday and the theme is: There is no theme.

At least not from an ad tech perspective in the Advertising & Marketing category. (Click here to read coverage of last year’s list.)

“The list does feel a little random,” said Melissa Parrish, VP and research director at Forrester.

A number of exits in the space over the past few years could be partially responsible. Venture capital also isn’t as forthcoming as it once was in ad tech.

“Some of the leaders have either been acquired, like Tapad, or grown past the hypergrowth stage – this is a symptom of a maturing market,” said Martin Kihn, research VP at Gartner. “VCs are [also] very sour about ad tech these days, so big money isn’t flowing into startups without an A-list pedigree and solid plan.”

Although DataXu, for example, increased revenue from $200.5 million to $236 million, a competing demand-side platform like MediaMath, which claimed healthy growth and revenue on last year’s list (344% growth and $601 million in revenue), didn’t make an appearance this year.

That seems to suggest a leveling out of the market, Parrish said.

“These are stable businesses,” she said. “It’s perfectly fair to speculate that they’re doing well, they’re just not making 100% more year on year, which is to be expected.”

In the case of The Trade Desk, however, there’s no need to speculate. Although the recently public DSP didn’t make the Inc. list this year as it did last year, on its earnings call last week CEO Jeff Green attributed the company’s accelerating growth – $72.8 million for the quarter – to consolidation in the DSP space and to mobile advertising.

Judging by a few other companies on the list, marketers do appear to be shifting more budget to mobile.

Liftoff, a mobile retargeting and app-install marketing platform, ranked No. 8 overall, with 16,980.75% growth and $59.6 million in revenue, while Kargo, a mobile ad company with a focus on creative, made the list for the third year in a row with 618.89% growth and $130.1 million in revenue.

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A handful of smaller mobile companies are growing like weeds, but revenue is still middling. Mobile publisher-centric software player PadSquad, for example, grew 912.91% with modest revenues of $10.6 million.

A few location companies also dotted the list, including GroundTruth (formerly xAd), Gimbal, NinthDecimal, Simpli.fi and Netsertive, pointing to a growing interest from marketers in location data and localizing their campaigns.

Marketers are getting experimental with their budgets.

“They know how to manage the majority of their programmatic omnichannel spend; they have good partners for that and they know how to work together,” Parrish said. “Now it seems like they’re saying, ‘Let’s see what happens if we test this thing and this thing and this other little thing. It’s possible that [experimentation] is even a sign of the maturation of programmatic, which is excellent and a long time coming.”

It’s also worth noting that Integral Ad Science continued its growth trajectory with $111.7 million in revenue (up from $93.2 million last year), capitalizing on the demand for clean and reliable data – ”the greatest prize of all and the most difficult to find,” Kihn said.

“I was not surprised to see Integral Ad Science on the list given the past year’s mania for verified impression data,” he said.

Below are the highlights of the survey, including reported revenue, ranked in descending order according to three-year growth rate.

Standouts that cracked $100 million in revenue in addition to DataXu, IAS and Kargo, include Revcontent ($183.3 million), PulsePoint ($119.8 million), GroundTruth ($163.4 million), Cardlytics ($112.8 million) and Teads ($207.8 million). Revenue numbers cited by Inc. are unaudited and may include the price of media.