In advertising, if you deliver better results, you will get more advertising dollars thrown your way. That appears to be what is happening with Rocket Fuel, an online ad optimization startup which is showing some promising growth. The company only launched last year, but its third quarter revenues of $5 million were ten times higher than last year’s, according to CEO George John. Its annualized revenue run-rate based on the past 30 days is $30 million ($20 million based on the past quarter), and the company is already profitable.
Advertising tech companies can become very lucrative once they hit their stride. Rocket Fuel is still tiny compared to most, but it is winning over big brands. (Eight of the top ten global brands run online ads through Rocket Fuel). Rocket Fuel takes a very simple approach to delivering better ad impressions: it tests every single ad placement and display unit, and keeps changing the campaign bases on what works.
Sounds basic enough. After all, that is exactly how most keyword search marketing campaigns are managed. But in the display world, many advertisers never try more than one ad layout. Rocket Fuel supplements its ad units with single-question surveys to gauge exactly what kind of audience it is delivering to advertisers. Instead of the ad, it displays the question. Clever.
A year ago, Rocket Fuel looked more like an ad network, buying up its own inventory to resell. But now about half of its ads are bought through realtime bidding exchanges on behalf of clients. The ad inventory on these exchanges are all commodities. It is what companies can do with that ad inventory after they get it (such as adding intelligence and better targeting capabilities) that counts.