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Although the media world has seen an increase in minority-owned companies and platforms, such organizations It still represents a part of the landscape. However, that doesn’t mean they aren’t growing. And Direct Digital, a small ad technology company that owns sell-side platform Colossus SSP, as well as demand-side platforms Huddle Masses and Orange 142, has seen growth in triple-digit percentages over the past two years.
Direct Digital released its second-quarter earnings late last week after going public in February, reporting revenue of $21.3 million, an impressive 90 percent increase over the same quarter in 2021. Net income also increased 58% from Q2 2021 to $2.6 million. Although the company isn’t yet public — and has been growing on a small base — Direct Digital has already forecast revenue growth of 330 percent in 2021 and 235 percent in 2020, attracting business from the likes of the National Basketball Association, HP and Bayer.
Digiday caught up with Mark Walker, founder and CEO of Houston-based Direct Digital, and LaShaunda Goffey, CEO of Colossus SSP, to learn how the economic slowdown has affected their businesses, and how agencies like the adoption of ad technology and focus on diversity have felt more than two years after the death of George Floyd. He made the industry deliberately favor minority media.
This interview has been edited for space and clarity.
What factors contributed to your growth?
Goffin: Between cold calling and knocking on doors, once we finally get someone to listen to us, they get it. Colossus was created from a place where it was needed, we saw that there is no difference in a reasonable place – a one-stop-shop. We truly wanted ourselves to be partners in efficiency. And when you explain why exactly, I don’t want to say it makes no sense, but it makes sense. When we are inclusive, we are not exclusive. One thing we want to make sure you can do when making any purchase at Colossus Exchange is represent what you see outside your windows.
How has the media agency world responded to your existence? Are they on board?
Goffin: When Colossus was founded in 2017, social unrest was brought to the fore by many of the partners DE&I works with, both at the agency level and at the company level. Now we’re starting to get more entries, because Colossus is now associated with multiculturalism and inclusiveness. Everyone is enjoying the right because it is so widespread in the media. But I want to make sure that Colossus is not in that ballpark [just] because of [DE&I concerns]. It’s good that agencies have a place to go, and they’re realizing it’s there. [DE&I] Deficiency, or you didn’t pay enough attention to it. That is what we can do through strategic partnership and education.
In the year After the social unrest of 2020 and the desire to invest more in minority media, it seems to have slowed down, and there is less monitoring from the agency side. Do you feel that way?
Goffin: At first we saw a lot of headlines with brands and companies saying, ‘Let me know, I know this is an issue, I’m going to do something about it.’ And to their credit, the talks are still happening. You may not see a lot of press. [today]But since the first releases…people are talking about it and doing the work. And that might not be a bad thing. My team was very proactive in making sure they were protecting those people faithfully.
Walker: For our agency partners, some of the largest companies, we are still actively working to figure out how we can deliver on those promises.
How and what are the challenges to progress?
Goffin: One of the biggest burdens is, everyone knows everything, and they just want you to do what you ask. That biggest hurdle comes with the whitelist – ‘We want to reach African Americans or Hispanics, so we only want to run on People en Espanol, Ebony and Jet.’ Now it’s our job to say, ‘You come to us, let’s show you where to find this audience – other publications you don’t know about that might not be mainstream.’ It’s really getting them to open their minds and loosen up a little bit. Speaking to a specific audience requires a different approach. There may be keywords that can be negatively signaled, which can be a positive thing for a certain minority group in the vernacular. It’s about having that conversation, and then being open to us teaching you how to reach that audience.
Walker: Another big problem we’re dealing with is how, many of the different holding companies have previous relationships with different technology platform partners. We spend a significant amount of time working with programmatic advertising. The objective can be from a brand and an advertising agency. But now you have to work through a lot of technology partners, get all those connections to get your dollars, and we spend a lot of time working through those partners. Some don’t want to make that level of investment, so there’s a lot of work involved in selling the value and the relationship. Many different relationships must be formed, and those relationships take time to develop and mature.
Goffin: Is it the chicken or the egg? Nobody wants to pay a million dollars for a two-week campaign if they don’t know what they’re doing.
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