Featured Article 22 Jan 2014

Silicon Republic
January 21st 2014

Switzerland of online advertising profits from a chaotic digital world

Amid the hustle and bustle of October’s Web Summit in Dublin, IDA Ireland announced 335 new digital jobs, with San Francisco, California-based online advertising company AdRoll to create 100 of those jobs in Dublin.

The presence of AdRoll customers in Dublin, including Google, Facebook, Yahoo!, Twitter and many others, attracted the self-proclaimed 'Switzerland' of the online advertising world to the city.

AdRoll was formed in 2006 and has so far raised US$26m in venture capital. The company specialises in delivering targeted advertising to the vast inventories of social networks, web search engines, and lately the websites of traditional media, such as The New York Times, which has set up its own digital ad exchange.

Valentino Volonghi, AdRoll's chief architect, said the company's growth in Dublin has exceeded its wildest expectations.

AdRoll announced its move into Europe in Dublin on 30 October and since then its customer base in the EMEA region has grown 40pc and overall revenue from the region has grown 50pc, Volonghi said.

Its headcount has also increased, from five employees in November to 32 by the beginning of January, in product and engineering as well as sales and management.

“Our goal is to have 30pc of our total headcount in Dublin engaged in engineering," Volonghi said in what is a departure from the norm - having prized engineering roles usually stay in San Francisco or neighbouring Silicon Valley.

The role of AdRoll

AdRoll functions as a service provider to various online entities, helping them fill advertising inventory in a targeted way in a world that has moved beyond basic web-page advertising to one that now includes mobile, social and other platforms, like digital TVs and games consoles.

According to Gartner, annual global revenue from mobile advertising alone increased from US$9.6bn in 2012 to US$11.4bn in 2013, and is tipped to reach the heights of US$24.5bn by 2016.

Online advertising in Ireland increased 12.8pc to €73.2m in the first half of 2012, according to the latest Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) figures.

Paid-for search advertising grew from €27.2m to €32.7m year-on-year, representing a 45pc share of the total online ad spend. Display advertising holds a 34pc share of the market, with spend of €24.6m up €3.9m on the previous year. Advertising on social media sites during the first half of 2012 came in at just less than €3m.

AdRoll has come in at a time when the landscape for targeted advertising has become more complex across devices and genres.

“We saw the potential to bring our technology related to the data these companies themselves are generating on their sites and we help them to understand how this data relates to them," said Volonghi.

“We have been successful in North America and increasingly in Europe, because we focus on reducing the complexity - whether it's a large internet giant or a small-sized business."

Neutrality and AdRoll

Being neutral is key, Volonghi said. "AdRoll is like Switzerland. Because we are not part of any particular network or have no vested interests we can move back and forth across various inventory resources and technologies."

It doesn't matter whether it's an iPhone or an Android phone or any specific social network, any tech is as important as the other, as AdRoll sees it.

“By being independent we have been able to build long-term relationships with the biggest players, like Google, Twitter or Facebook," Volonghi said. "We were the first company to be invited to the Facebook Ad Exchange and the Twitter Alpha programme."

Asked if the various internet firms are in danger of creating walled gardens or internets within the internet, Volonghi predicted such trends will eventually die down.

“Facebook's strategy to deal with its large inventory is to work with external providers and likewise with Google in 2009 it decided that the most efficient way to fill inventory was external parties through an exchange," Volonghi said.

“We believe in the future more ad exchanges will be opened across the world, particularly by media companies."

Volonghi added that AdRoll believes that in the future more and more exchanges to sell inventory on a targeted basis will be opening up in the world, including players like LinkedIn, Foursquare and Pinterest. The key to this is trends like big data and consolidating the data the companies have.

“Our purpose is to be the single point of consolidation so they can mine that data better and achieve better results," Volonghi said.

“In a perverse sort of way, the more complicated the online advertising market becomes, the better it is for AdRoll."

Volonghi said Dublin is at the heart of this trend and the city is the best place to replicate what AdRoll has done in San Francisco.

“We have the capability of integrating multiple cultures in a single city that is capable of sustaining the rapid growth of a company like ours," he added.

“Dublin is home to customers like Facebook, Twitter and Amazon but also competitors like Salesforce.com - and so far it has been a positive and humbling experience. We've learned a lot about how to do business in Europe from just a few months in Dublin."

A version of this article appeared in The Sunday Times on 19 January

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