Rubicon CEO On Adding ‘Guaranteed’ To Automation

rubicon-frankIt’s been a busy week for Rubicon Project.

It acquired programmatic direct players iSocket and Shiny Ads on Monday, adding guaranteed capabilities to its platform. It partnered with Apple’s iAd, ramping up its mobile supply. And last Friday, it hired Adam Chandler as SVP of revenue as the company builds out its buy side.

Rubicon’s CEO, Frank Addante, talked to AdExchanger about the iSocket and Shiny Ads acquisitions, and what’s ahead for Rubicon and the industry at large. The interview was conducted before news broke of Rubicon’s iAd relationship, but Addante provided comments on iAd in response to a followup request.

AdExchanger: Why make this deal, and why make it now?

FRANK ADDANTE: The simple answer is that the market is ready for direct orders, and automation has become top-of-mind for the largest buyers and sellers in the world.

We already have the integration in place with the sellers and the buyers. Because we’ve got such massive scale, we’re able to apply this capability as another set of features to our platform rather than treating it as a new business.

Were Shiny Ads & iSocket ahead of the market?

It’s better to be early than late, for sure. When we started Rubicon Project in 2007, I wouldn’t say the market was ready for automation; it was something we pioneered, and we spent a lot of time educating the market. They were doing the same thing. Now we get that benefit. 

Why structure the deal the way you did, acquiring both companies at the same time? 

We wanted to double down and put us in a position to own this market, so we decided to do both. We believe this is going to be a $60 billion direct-order automation market.

We looked at both companies, and they both have great teams and great products, and have specialized in different areas. Both of them have great integrations into the ad servers. Shiny Ads is really focused on the self-service interface.

Where was Rubicon in the market pre-acquisition? Post-acquisition?

We’ve been in market with our direct-orders product for years. It’s another area of the market we pioneered. It didn’t exist before we created it.

We’ve already made great traction, and now Shiny Ads and iSocket give us the rest of the capabilities, particularly around guaranteed automation. We were already ahead of the market, and now we’re squarely ahead of it.

What parts of iSocket and Shiny do you expect to keep?

We’re still working on the integration plans. Again, we’ve already been in market with our direct orders product. The three most important capabilities that iSocket and Shiny Ads have are, one, their integrations into the ad servers. The second is ShinyAds’ self-service interface: The easier we can make it for buyers to purchase advertising, the better. The third, which they both have, is the guaranteed capabilities for automated guaranteed direct orders.

Prior to the acquisition, was Rubicons direct orders business a private marketplace or did it handle automatic guaranteed?

Automatic guaranteed is just a feature. There’s two types of orders, there’s non-guaranteed and there’s guaranteed. We’ve already been in market with the non-guaranteed portion. Guaranteed requires some additional capabilities and features, and that’s what iSocket and Shiny Ads provide.

How easy or hard will it be to add that automatic guaranteed capability for buyers or sellers? 

The sellers and buyers are already integrated into our platform. The reason we invested so much early on in doing these integrations with buyers and sellers is because we planned to add additional capabilities to our platform. To us it’s all automation. They don’t want to be using all sorts of different platforms, they prefer it’s integrated into one platform.

But a lot of publishers these days use multiple platforms, not just one.

I think it goes in waves. It’s not in the sellers’ best interest to do it in the long term. But this market is growing so fast that there’s this behavior in the market, which is to test new things. Adding layers of complexity works against what automation is intended to do, which is to simplify things.

If you were to rank the reasons for the deal – whether its people, technology or market share – what order would they be in?

Number one is technology. Number two is the people. They’ve got a great team with incredibly smart engineers. Number three is market share.

We’re a technology company, and you can see from financials that we invest heavily in technology and R&D. Every decision we make starts with technology. The bar for us to acquire a company is so high because our engineering team is so strong. Any acquisition has to exceed that threshold.

Do you think your deal will inspire more deals of this type, with a smaller player being acquired?

We looked at the market, and iSocket and Shiny were the two best we could find. There might be a couple of other smaller companies out there, but nothing we found had the technology strength, the scale, and the team.

I was told that Shiny Ads was on the verge of bankruptcy. And iSocket was definitely ahead of the market – it had raised over $17 million before the acquisition. Is that true, and could that have been a reason for the dual acquisition?

Our decisions were about acquiring the best technology and the best teams. Those were the drivers.

How will Google enter the market, and how would it compete with Rubicon?

I certainly don’t know what their plans are. We continue to lead and be ahead of the market. When we launched in 2007, we were the only company pioneering automation and RTB. Years later, Google followed with their acquisition of AdMeld.

Part of our job is to be an innovator and lead the market, and that’s what we continue to do. I’m sure others will try to follow, but we’ve got the advantage of scale, network efforts, and existing integrations with buyers and sellers. It’s really difficult for these companies to catch up because of those network effects.

Do those network effects also mean that theres only room for a few players in the business?

If you look at other marketplace-type businesses, it’s NASDAQ and NYSE. Amazon and eBay in retail. Even the travel industry, it’s Sabre and Galileo. Typically in those marketplace businesses, there’s largely two major players and a bunch of small ones. I think it’s possible that this market will shape up that same way. There’s certainly room for more than one.

How does the partnership with iAd fit with other recent moves Rubicon Project has made — from the hire of Adam Chandler as the SVP of revenue for the Buyer Cloud to the Shiny Ads and iSocket acquisitions?

In the Apple iAd deal, Rubicon Project is bringing ad buyers and allowing them to transact directly with iAd’s network of  more than 250,000 mobile apps using Rubicon Project’s direct order automation technology. This is a significant milestone for the company as we continue to focus on mobile, video and direct orders in 2015.

Our goal is to enable buyers and sellers to connect in any and all of the ways that best fit their needs, whether that be through an automated auction or through automated direct orders, or by using DSPs, ad networks or negotiating and transacting directly with each other.

How does the iAds partnership change Rubicon’s mobile supply?

In addition to our existing large scale user base, Apple iAds brings more than 120,000 mobile applications in its marketplace that are used by more than 225 million users across the globe.

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