Rubicon Project is merging with Telaria, in part, because it thinks offering capabilities in connected TV advertising would require heavy investment.

The pair of ad-tech companies announced their intention to merge in December, in order to seize the opportunity emerging in connected TV advertising alongside inventory of other digital channels.

They say the combined company – owned 47.1% by Telaria shareholders and 52.9% by Rubicon shareholders – would “offer a single platform for transacting Connected TV (CTV), desktop display, video, audio, and mobile inventory across all geographies and auction types”.

In this video interview with Beet.TV, Rubicon Project CEO Michael Barrett explains the rationale for the move…

“The missing piece of the Rubicon portfolio was our ability to work with our publishers on their CTV (connected TV) inventory,” he says. “Telaria combining with Rubicon just makes a ton of sense.”

Barrett explains that video publishers have changed the way they use supply-side platforms (SSPs) for selling and serving ads, whilst the business of selling video ads is even more different.

“Buyers are being very picky about who they work with,” he says. “They’re working with less and less SSPs. Publishers are working with less SSPs.

“From a video perspective, it’s still a very specialized area that requires a fair amount of resources to put into it. It’s a steep learning curve. Render rates aren’t where the industry wants them to be.

“To be able to have the resources that we will have as this combined entity – cash balances of $150 million, public market cap of over $1 billion – to be able to put that into the areas of the highest growth, the highest value, which is video and CTV, is going to be very exciting.”