According to eMarketer, the US programmatic digital display ad spending was estimated to grow from $32.56 billion in 2017  to grow to $45.72 billion by 2019. The growth will be driven by continued emphasis on advertising quality and brand safety. Billion Dollar Unicorn player AppNexus is hoping to cash in on this growth, if it can address the competition from the bigger players.

AppNexus’s Financials

New York-based AppNexus was founded in 2007 by ad-tech veterans Brian O’Kelley and Mike Nolet to create an advertising exchange platform for trading solutions and marketplaces for Internet advertising. Besides selling ads, AppNexus’s platform also provides analytical capabilities on a real-time basis.

AppNexus earns revenues through an 8.5% fee that it charges to connect buyers and sellers on its digital advertising platform. It does not publish detailed financials. Analysts estimate that the company is operating at gross revenues of $2 billion, translating to net revenues of ~$170 million. AppNexus is expected to be operating profitably since 2014.

It is venture funded so far with $321.5 million in funding from investors including WPP, Technology Crossover Ventures, Venrock, Tribeca Venture Partners, Microsoft, First Round, Kodiak Venture Partners, Coriolis Ventures, Ron Conway, Ben Horowitz, Khosla Ventures, and Marc Andreessen. Its last round of funding was held in September 2016, when it raised $31 million at an undisclosed valuation. Earlier funding rounds had valued the company at $1.2 billion. At the end of 2016, AppNexus had confidentially filed to go public at an estimated valuation of up to $2 billion. Analysts were expecting it to list in the second quarter of 2017. But there has been no further movement since the filing on its listing proceedings.

AppNexus and the Big Players

AppNexus may have maintained silence about its listing plans, but it is vociferous about the current duopoly in the digital advertising world. It is no secret that the online ad market is dominated by Facebook and Alphabet. AppNexus has been pushing itself along with other smaller players as the third option available to customers.

Last year, AppNexus tied up with LiveRamp, MediaMath, Index Exchange, and LiveIntent to create a consortium to build a standard framework that will enable people-based media buying for advertisers looking to utilize programmatic technologies. Essentially, it will allow advertisers to use programmatic media from companies other than Facebook and Alphabet.

Currently, the bidding process in programmatic advertising is cookie based that cannot, always, transfer across devices. Facebook and Alphabet, on the other hand, can circumvent this issue by using logged-in user data. By adding identity resolution to programmatic advertising, marketers will be able to deliver relevant content and enhance consumer experience.

The consortium will enable participants to have access to an identity framework that is built by pairing an encrypted version of people-based identifiers across devices, while respecting privacy and security. The consortium will deliver more transparency, efficiency, and competition within the industry.

Additionally, to target the bigger players, AppNexus is improving its product offering. Its latest product is a revamped ad buying software called the AppNexus Programmable Platform (APP) that simplifies the ability of buying lots of digital ads on lots of websites and eliminates the need for manual bidding. APP is the industry’s first programmable platform that empowers traders to buy automatically on views, instead of impressions. It enables people-based advertising at scale on the open Internet, thus delivering better returns to bigger advertisers.

AppNexus is focusing on product and service enhancement, but it still needs to be mindful of the changing patterns in the industry. Other players with bigger purse strings are making their presence felt. For instance, Adobe offers a one-stop shop to marketers by helping them buy and sell ads, along with providing them analytics and data storage capabilities. Then there is Amazon, which many believe is the sleeping giant in the industry, as it is becoming an increasingly preferred place for commerce-based searches. And, maybe it is this uncertainty in the market that is keeping AppNexus away from the stock market.