Rubicon Project Grows Revenue To $37.9 Million With Positive RTB Trends

Rubicon Project took in $37.9 million in Q2 2019, up by almost a third from the same period last year, according to the company’s earnings report on Wednesday.

Rubicon was cash flow positive for the second consecutive quarter, but still had a net loss of $8.3 million. Though that figure is down from Q2 2018, when Rubicon was $18 million in the red.

Rubicon is converging on profitability from two sides. After a period of cost-cutting and layoffs in 2017 and 2018, Rubicon’s total expenses are down more than $1 million in the past year, CEO Michael Barrett told investors.

Rubicon has grown its ad spend and, critically, has seen CPMs rationalize in the past quarter, after a tumultuous shakeup to bid prices, Barrett said. Header bidding raised ad rates by increasing bid density, and the demand side countered with bid shading tech to “find the bottom” on pricing without impairing win rates.

That seesawing seems to have steadied out, Barrett said, and overall it’s a positive trend for the SSP.

Poaching Prebid

Rubicon’s Demand Manager, header bidding technology built on the open-source Prebid code, still isn’t revenue positive, but Barrett said the company “remains confident it will be a growth driver starting in 2020.”

One of the reasons Rubicon is bullish on its wrapper is that it doesn’t face crowded competition, Barrett said. The competition is publishers using the open-source Prebid software on their sites.

While Prebid is free, there is a fee for Demand Manager – which is sold as either a percent of media or on a consistent SaaS rate. But Barrett said most customers opt to pay the media margin. Rubicon’s pitch is that the open-source tech actually costs many publishers, in terms of wasted time, bloated code on their sites and additional security or analytics features that they might otherwise have to pay for.

“Can we build a product with enough benefits that they’d use Demand Manager instead of using Prebid themselves?” asked Barrett. That’s the driving question for Rubicon, and it could be lucrative if the company can seize meaningful share of publishers with in-house Prebid tech.

“(Another) benefit is that we don’t have to extol the benefits of Prebid,” he said. “They’ve already adopted that.”

The SPO opportunity

Supply-path optimization (SPO) and vendor consolidation have been hot-button topics for advertisers and publishers this year.

Generally, those trends work against ad tech intermediaries. But Barrett said consolidation in the supply chain has been a tailwind for Rubicon, because it’s able to stand out as a scaled, independent option that’s built on Prebid. By contrast, Index Exchange’s header bidding solution uses proprietary code instead of the open-source foundation.

In the past year, Havas Media has trimmed its vendor roster from 40 to about eight. But it’s done so with Rubicon as a strategic partner.

Rubicon’s publisher deals help it establish strong partnerships with agencies, Barrett said, because advertisers want more direct and PMP buys and the data transparency that comes with direct relationships.

“And, let’s face it, advertisers don’t want to give more of their money to Google,” he said. “We’re a great alternative.”

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