And he anticipates growth from direct sales to marketers “who want to take [programmatic] in-house and have more control over identity management and activation technologies.” He pointed to the July hire of Chief Revenue Officer Rick Song, who has experience selling to brands in particular.
But the cheese is at the holding companies.
Last quarter, penetration with international agencies drove 6% YoY net revenue growth. The international line of business is still rolling, up 31% YoY this quarter to $24.1 million.
“But to be frank, it’s growth on top of relatively smaller dollars than what you see in the States, and some of the agencies in EMEA are just coming into programmatic,” Wootton conceded.
The North American agencies were Rocket Fuel’s bugbear last quarter, and remain so this quarter – which is why the company is trying to get in good with the agency trading desks. (Total North America revenue was $92.8 million, a 9% YoY decrease.)
When Wootton took over as CEO last November, Rocket Fuel bit off more than it could chew by engaging with all six holding companies. It then whittled that effort down to four, moved forward with three and has over the last few months focused on building out unique capabilities for one (undisclosed) holding company.
“And it’s hard because they have established partners in place, so you need to create real value,” Wootton said, adding that Rocket Fuel is close to signing a long-term software contract.
Even after the contract is signed, it’s a long process to get business within the holding company and show revenue.
“You need clearance by the trading desk that you’re a preferred partner,” Wootton said. “Then you have to convince the operating agencies and brands to use you. We have some where we have great relationships and others within the same holding company family that are more resistant to us.”
Which is why Rocket Fuel doesn’t expect any material revenue impact from any of the holding companies this year. “We were hoping for upside, but it’s not critical to us achieving our sweeping goal of being cash-flow positive this year,” Wootton said.