When it comes to ad-tech analysis, a lot of people like to think that RTB, or real-time bidding, works like a charm. However, Nanigans CEO Ric Calvillo thinks a little bit outside of the box, looking to chase a somewhat bigger market.

“RTB is only $4-$5 billion,” said Calvillo, talking about exchanges where sales of millions of ads per minute in automated billing mini-wars lead to revenue, through real-time ad delivery through web and mobile apps. “The online global ad market is about $100 billion…and between Google, Doubleclick, YouTube and Facebook, direct-to-client ad sales via self-serve total about $20 billion.”

What’s that mean “So 20 percent of the market has been sucked out of the ecosystem,” Calvillo believes.

That’s why he’s pursuing an ad-reselling ecosystem, which becomes filled with a mixture of third parties of advertisers and publishers, as well as supply-side networks, demand-side networks, ad resellers, real-time exchanges and other specialist companies. By doing so, Calvillo believes he can take on Facebook and Google, which is no easy task.

Mark-up plays a huge part when it comes to the ad market. “The typical markup on media is 100 percent,” he says. “If they were really selling it for $20B, third parties would have made some of that…there’s at least $10B of extra margin that Google and Facebook have captured.”

The ad-tech ecosystem is certainly on the rise as a result, and Nanigans wants to get caught up in the action, as it currently processes 250 million ad events daily, with a better idea of where advertisers’ money needs to be spent.

What Calvillo wants to do is become more of a software-as-a-service company model for Nanigans, rather than the usual Facebook-laced advertisement management partner. “When Facebook and Google go offer their own inventory, they act just like a network,” said Calvillo. “Then they add 32 percent mark-up between the SSP (supply-side) layer and the DSP (demand-side) layer. We think SaaS can disrupt that.”

A bold order Sure. But if Calvillo and his team at Nanigans can play their cards right, it could be extremely profitable.

Source: VentureBeat