One reason for the low quality, Addante said, stems from what its customer base isn’t selling. Rubicon targets “top 500” publishers, most of which sell all their premium video offerings directly. So while opportunity exists for Rubicon to enter video through its orders business, right now the company sees less opportunity in video exchanges.
Rubicon continued to make its pitch to investors in the call, comparing its business to the “stable and predictable” software-as-as-service businesses like Salesforce and Oracle. Addante pointed out the similarities between Rubicon and Amazon and eBay, other “marketplace” businesses that have higher take rates than financial exchanges.
Rubicon’s proof may also be in its results. It made significantly more money this quarter. Last quarter, it reported $800,000 in EBITDA. This quarter, EBITDA came out to $4.8 million.
Rubicon emphasized the stickiness of its platforms, and outlined its integration times. Sellers can take weeks to set up rules in Rubicon’s platform. Within the platform, they can compare Q4 of last year to the current year, using those insights to optimize pricing. Sellers don’t want to lose that data.
The same holds true for the other side. DSPs have to write code to connect, which requires a three month cycle of development and six months to synchronize cookies and data IDs, Rubicon said.
As the company moves into the orders business, which uses DealID, Rubicon has noticed resistance to the fact it “forces transparency,” Addante said. “We’re trying to convince these companies that transparency is good and not a threat to the industry. “A lot of the buyers of platforms are not transparent. Some of those companies are reluctant to see [transparency] happen, either because it exposes their business model, or puts the customer in direct contact with the seller.”
As Rubicon addresses the challenges within digital advertising, it also made clear it plans to automate more than just digital advertising. We see “continuing opportunity to move into adjacent markets,” Addante said, including TV, out-of-home, radio and print.
Rubicon is putting R&D dollars behind those initiatives, though Addante declined to say just how much was focused on automating advertising outside of online. “f you look at the history of our company, we invest a lot more in technology & R&D, than the ad tech companies do. Our development efforts are always focused on the future.”