



Can $MGNI profitably grow in this NEW sector?
Here is an EASY thread

$MGNI Magnite is an US based online advertising technology firm
The company was formed following a merger of the Rubicon Project and Telaria
The merger turned Magnite into one of the world’s largest independent omni-channel sell-side platform


Ok, this isn’t clear. Let’s dive into the world of Advertising Technology
You are working for Nike’s marketing department and need to get Nike’s ads online
You go on Google Adwords, create an account and start bidding for your adds to get published on sports websites





So this is not great! Here comes Demand-Side-Platforms (DSP):
A DSP is software used by advertisers to buy advertising inventory from publishers
Advertising inventory is the space available from publishers for ads (eg: a box on a website meant to be filled with an ad)





So, problem solved! Instead of crawling through advertising platforms

But we are still missing a piece of the total equation!
Advertisers use a Demand Side Platform to have their ads displayed
But how do websites / publishers make sure that their DSPs know about their advertising inventory?




SSP platforms work in the same way as DSP, the difference is that publishers rather than advertisers use these
A SSP send its available ad impressions to potential buyers
The goal of the SSP is to send as much ad impressions AND get the best price as possible




This falls under Programmatic Advertising
It is the process of buying and selling ads with software and publishing those ads on the right website using algorithms
Most online advertising now is done programmatically through real-time bidding and direct deals


Here is the full review:
https://instapage.com/blog/demand-side-platform https://publift.com/what-is-supply-side-platform/
https://instapage.com/blog/demand-side-platform https://publift.com/what-is-supply-side-platform/
And where does MGNI fits in? $MGNI is an independent Supply Side Platform
It thus competes with other SSPs but also with advertising giants such as Google, Facebook and even Amazon
Given their daily page views, these giants have a lot of advertising inventory to sell
It thus competes with other SSPs but also with advertising giants such as Google, Facebook and even Amazon



But how are these giants’ sales evolving? Here is from eMarketer
The Facebook - Google Duopoly’s share of US digital advertising is decreasing from 60.9% in 2019 to 60.7%

On the other hand, smaller publishers are consolidating:
“To better compete with them, smaller publishers are also consolidating and partnering up in other ways to allow advertisers to buy audiences at scale.”
“To better compete with them, smaller publishers are also consolidating and partnering up in other ways to allow advertisers to buy audiences at scale.”
“Notable recent acquisitions include Vox Media’s purchase of New York Media and Vice’s purchase of Refinery29”
from https://www.emarketer.com/content/facebook-google-duopoly-won-t-crack-this-year
from https://www.emarketer.com/content/facebook-google-duopoly-won-t-crack-this-year
Competition is also coming social media players as $PINS $SNAP $TWTR 
“Strong reports from smaller advertising players shows there is still an appetite from marketers to diversify their ad spend across platforms. New advertising offerings could also be luring in businesses.”

“Strong reports from smaller advertising players shows there is still an appetite from marketers to diversify their ad spend across platforms. New advertising offerings could also be luring in businesses.”
“Amazon and Twitter executives both told analysts on their earnings calls that new and improved product offerings overall are giving advertisers more of a reason to advertise with them.”
By Lauren Feiner for CNBC https://www.cnbc.com/2019/08/02/facebook-and-googles-ad-dominance-is-showing-more-cracks.html
By Lauren Feiner for CNBC https://www.cnbc.com/2019/08/02/facebook-and-googles-ad-dominance-is-showing-more-cracks.html
This is good and bad news at the same time
Large publishers such as Google and Facebook are loosing ground
Smaller publishers are gaining share and consolidating on their turn
Demand for the Rubicon Project’s product is growing but reflects the weakness listed above



Here is the Rubicon Project’s sales growth over the last quarters 
· 27% in Q3 2019
· 17% in Q4 2019
· 12% in Q1 2020
· 12% in Q2 2020 (for the whole Magnite Group)
· 12% in Q3 2020 (for the whole Magnite Group)

· 27% in Q3 2019
· 17% in Q4 2019
· 12% in Q1 2020
· 12% in Q2 2020 (for the whole Magnite Group)
· 12% in Q3 2020 (for the whole Magnite Group)
But what is the pitch for $MGNI 
There is one thing showing tremendous growth each quarter: Connected TV (CTV)
“CTV revenue grew 51% year over year in Q3 2020 to $11.1 million on a pro forma basis” - $MGNI Q3 ’20 Report
$MGNI expects strong CTV growth in Q4 2020

There is one thing showing tremendous growth each quarter: Connected TV (CTV)

“CTV revenue grew 51% year over year in Q3 2020 to $11.1 million on a pro forma basis” - $MGNI Q3 ’20 Report

The $MGNI story is all about serving ads to CTV
According to eMarketer, the CTV ad spend is set to rise from $ 6.4B in 2019 to $ 18.3B in 2024
With revenues from YouTube, Hulu and Roku representing around 50% of all CTV ad sales
https://www.emarketer.com/content/us-connected-tv-advertising-2020


https://www.emarketer.com/content/us-connected-tv-advertising-2020
On top of this, eMarketer found out that this channel was still little used by advertisers 
“We found that while CTV/OTT spend has increased, there is a significant opportunity for advertisers to include these channels in their marketing mix.”

“We found that while CTV/OTT spend has increased, there is a significant opportunity for advertisers to include these channels in their marketing mix.”
“Fewer than 40% of advertisers have spent on CTV/OTT channels in the past year, significantly lagging behind social media, display, and non-CTV/OTT video.”
from https://www.emarketer.com/content/ott-ctv-advertising-will-breakout-star-of-2021-sponsored-content
from https://www.emarketer.com/content/ott-ctv-advertising-will-breakout-star-of-2021-sponsored-content
This explains the rationale behind the Telaria and Rubicon Project merger
Use the Rubicon Project experience with ad exchanges
And Telaria’s expertise in CTV ads






















Disclaimer - This is not investment advice in any form and investors are responsible for conducting their own research before investing.
Sources
✑ Investor presentation
✑ Company website
✑ eMarketer
✑ CNBC
✑ Instapage
✑ Clearcode
✑ Statista
✑ Forbes
Sources
✑ Investor presentation
✑ Company website
✑ eMarketer
✑ CNBC
✑ Instapage
✑ Clearcode
✑ Statista
✑ Forbes
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