Rubicon Project Explains the Strategy Behind Its Turnaround and Teases Header Bidding Tools

Independent ad tech is widely perceived to be in trouble with the continued question marks over the sector including the dominance of the industry’s walled gardens, the decline of cookie-based ad targeting, plus the cut and thrust of supply path optimization. However, the leadership of Rubicon Project, one of the few remaining publicly-listed ad-tech companies, claims the programmatic ad exchange is in prime position to weather such storms, posting revenues of $32.4 million in the opening quarter of the year, 30% up from 12 months earlier. Rubicon Project CEO Michael Barrett said in a statement the numbers for the opening quarter of 2019 “were essentially EBITDA break-even” albeit they amounted to an operating loss of $12.5 million, an improvement of 55% compared to 12 months earlier. Mobile now accounts for 63% of revenue with leadership also reporting that “video revenue nearly doubled” during the quarter with Barrett claiming this was the compound result of its turnaround strategy over the last two years. This includes efforts to improve calls for transparency—such as the dropping of its buyer fees—emanating from both the sell- and buy-side of the marketplace, plus efforts to become a leading voice in the emergence of header bidding, something its previous leadership was slow to respond to. Speaking on the company’s subsequent earnings call, Barrett hinted that it was weeks away from unveiling technology that will help publishers better deal with the complexity of monetizing their inventory using header bidding. Barrett went on to explain that the first wave of media owners to embrace header bidding saw initial revenue increases, but now as these CPMs “normalize” and publishers face revenue pressures, solutions to the complexities posed by such technology are of crucial importance. This is because header bidding’ adds layers of code to a publishers’ homepage thus eroding the end-user experience and also making it easier for bad actors to remain in the ecosystem, according to Barrett. “It's become clear that solving these challenges are of central importance if programmatic is to continue to work for sellers,” he added. Rubicon’s new solution will essentially expand upon its earlier work of co-founding the prebid.org community, an open source framework aimed at helping publishers deal with the technical challenges of managing multiple programmatic demand sources, and is already in beta with Rubicon’s top clients where it has received a “phenomenal reception.” Such measure towards differentiation will help Rubicon Project weather the ongoing SPO storm that's leading many buy and sell-side operators to become more selective over what programmatic players they do business with, according to Barrett. Rubicon’s leadership also faced questions from financial analysts on the current privacy zeitgeist, which may lead to the erosion of cookie-based ad targeting that currently fuels most ad tech. Earlier in the year, Adweek revealed that Google is contemplating measures that could potentially see a significant reduction in online ad targeting using third-party cookies. This helped fell the stock prices of other publicly-listed ad-tech companies with Criteo facing repeated questions on the potential move earlier in the week, only for its stock price to slump further. Barret was eager to lay out how his company welcomed such a move and the measures it was taking to prevent itself from overexposure to such moves, including collaboration with The Trade Desk on its Unified ID solution, the IAB Tech Lab’s DigiTrust as well as its intention to collaborate with the LiveRamp-led offering soon. Although, he further went on to voice his opinion that while Rubicon was content to support all three initiatives at present, the industry should “rally together for a unified solution,” especially one that will help restore the power imbalance with the industry’s walled gardens. “To be honest, in order for this to work there has to be one solution that everyone leans into,” said Barrett. “We're going to try to put a lot of muscle behind that occurring along with the rest of the ecosystem on the supply-side because that's the ultimate solution and that's when it really catches fire.”

NexTech

Rubicon Project Explains the Strategy Behind Its Turnaround and Teases Header Bidding Tools

Ad-tech company claims it stands to gain from trend towards SPO

Ronan Shields

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Ronan Shields