Magnite is the world’s largest independent supply-side exchange for programmatic advertising.

In non-techie speak, it helps the website, mobile app, and TV show publishers embed relevant advertisements at the highest rates possible.

In order to get the most attractive advertising rates (usually sold as CPM, or ‘cost per thousand impressions’), publishers use Magnite to participate in online auctions. Any content that has space available for advertising – known as ad inventory – can solicit bids simultaneously from multiple interested suitors.

To illustrate, say that there are two men in a crowded room that’s filled with millions of other people. One of the men, “Don Draper,” is an advertising agency representative. Don knows what types of ads his agency wants to place and exactly how much they’d be willing to spend on them. The other man is James Bond (nickname “007investing”), who is the publishing representative for us at 7investing. James knows exactly where within our articles, podcasts, and video interviews we’d be willing and interested in placing ads (don’t worry, this is entirely hypothetical; we have no plans of introducing advertising anytime soon).

Even though the room is crowded, this isn’t Don and James’ first rodeo. They’ve both been trained by machine learning, so they instinctively know that each other are present and that their clients would be able to strike a deal. So they immediately meet in the middle of the room and shake hands, officially completing the auction and placing the advertisement.

Magnite’s supply-side exchange (“James”) represents around 2,000 publishing clients and facilitates 12 trillion bids with potential advertisers every month in order to successfully land those digital handshakes. The entire process of finding a buyer, winning an auction, and placing an ad typically takes around half a second.

The ultimate goal is to serve the perfect ad to the perfect viewer. Once an ad is successfully placed, Magnite charges its publishing customers between 10-25% of each transaction. This creates a win-win scenario: Magnite’s customers are winning more auctions at attractive rates, and Magnite directly takes a cut of that advertising revenue.

There’s one other thing investors should note. Two months ago, The Rubicon Project officially merged with its competitor Telaria. Together, they will have greater scale advantages and a huge head start in the important new Connected TV (CTV) ad market. The company officially changed its name on July 1, 2020.