Direct digital holding on why small pubs need programmatic

Mark Walker, CEO and co-founder, Direct Digital Holdings

Prior to co-founding Ad Tech and Mar Tech Holding Group Direct Digital Holding in 2018, Mark Walker was the Chief Operating Officer of Ebony Media.

His experience towards sales was constructive. A big part of Walker’s work was helping Ebony with its digital transformation and digital transition front print, programmatic monetization.

Walker quickly realized there was a “hole in the market.”

“We’ve seen small, medium-sized companies find it difficult to integrate into the programmatic ecosystem due to a lack of resources and skills,” Walker said. “We saw firsthand that if we did not have Ebony’s brand name, we would not have attracted the attention of SSPs for monetization.”

The idea behind Direct Digital Holdings, which is a mix of acquired and indigenous buy-sell-side technology, is to help medium-sized publishers access the same opportunities as larger media owners.

In February, Direct Digital Holdings IPO came under the ticker symbol DRCT on the NASDAQ. The company’s stock popped strong after strong revenue growth and its first earnings report last week projected above the guidelines. Q4 revenue rose 95% YoY from $ 6.3 million to $ 12.9 million, with first quarter revenue expected to hit between $ 11 million and $ 11.5 million, compared to analysts’ expectations of $ 8.42 million.

Walker, who is the company’s co-founder and CEO, spoke with AdExchange.

AdExchanger: Why house-buying and cell-side technology under the same roof?

Mark Walker: There are many tools in the toolbox that you can use to optimize campaign performance if you understand the buyer’s purpose. You can do anything on behalf of the publisher or SSP in a positive way, from the position of the ad on a page to how you rank an ad inside the stack.

When I was on Ebony, a lot of the time, if a campaign didn’t perform, buyers would cut it instead of figuring out how to optimize it. With Direct Digital, we’re on both sides of the equation, so we have the opportunity to curate.

In the past, this type of setup may have been seen as a conflict of interest, but do you think it could be an advantage?

We mainly trade in the middle market. We have clients in Colorado Springs, Pigeon Forge, Knoxville, Nashville – Flyover County. If they spend $ 1, they want a refund of $ 1.10 or $ 1.15 or $ 1.20. But how can you get there? They are not really worried about it.

They just want to make sure they’re getting the final results, and so if you work directly with a big brand you won’t see the same kind of channel conflict towards purchases.

So, I think it’s an advantage, but also a missed opportunity. However, with the acquisition of Criteo’s BidSwitch and Unruly’s acquisition of Tremor, these pieces began to come together.

What are all the different pieces in your stack?

On the buying side, we have Huddled Masses and Orange 142, two companies that operate independently. Both are profitable and have been excellent acquisitions for us. And on the sales side, we have SSP Colossus, which we own. That business has become the engine of growth for our company.

There are many more long established DSPs and SSPs. How do you differentiate?

It’s double. First, we have a focus on multicultural publishers. We’ve spent a significant amount of time and effort identifying small and medium-sized publishers trying to attract multicultural audiences, which we define as Hispanic American, African American, LGBTQ, and Asian American.

We offer shoppers a one-stop shop to reach those market densities with the general market.

We have a friendship with publishers as a whole and we want to be an advocate for publishers. Since being on that side, I know it’s hard to make money in this place.

The market is small. Strange at the moment. Why the decision to IPO this year?

It’s about accelerating growth. We have no private equity sponsors, we are not VC-supported and we have bootstrapped this company. My co-founder is Keith [Smith] And I am the majority shareholder.

We feel that reaching out to the public can help us gain market credibility, which is very important. Being ruthlessly honest, being a minority-owned company, credibility may not be what we give it to other companies.

But we also wanted access to public markets to help raise capital so that we could grow faster. We run a store that can sustain that growth, and we think that’s the right way to go, even if you fall in love with Wall Street.

Are you planning to raise any of that capital for more M&A?

I am not able to make any visionary statement – I have learned this tagline.

But, broadly speaking, probably yes. I think it’s safe to say that we have an organic growth strategy that we are very confident in, but if an opportunity presents itself, we must explore.

This interview has been edited and summarized.

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