Rubicon Project acquired header bidding management and analytics platform RTK.io for $11 million in cash on Monday.
The plan is to integrate RTK.io’s tech and analytics functionality into Rubicon Project’s Demand Manager product by the first half of next year.
“This will accelerate our vision to be a leader in the Prebid managed service business,” said Rubicon Project CEO Michael Barrett.
Rubicon Project’s Demand Manager, or “Prebid-as-a-service” product, introduced in May, helps publishers use Prebid without having to invest in engineering resources themselves to build out custom functionality for the open source product. Publishers using Demand Manager include Business Insider, Discovery Inc., Los Angeles Times and Everyday Health.
It was RTK.io’s similar, competitive technology that first caught the eye of Rubicon Project five months ago. The deal quickly came together over the past week.
Rubicon Project was also attracted to RTK.io’s use of the cloud, which allows its analytics to run especially fast. Plus, RTK.io will bring in its own publisher customer base, although Rubicon Project declined to provide an update on its own customer count, saying it’s waiting until the Q4 filing early next year to do so.
RTK.io employs 20 people, according to LinkedIn, all of whom received offers to join Rubicon Project. Its engineering team, in particular, will fortify Rubicon Project’s expertise in building tech for the header.
Getting scooped up by Rubicon Project is a “great outcome” for a startup like RTK.io, which was self-funded five years ago, Barrett said. RTK.io reached the point where it would need to either make a huge investment to grow its product – or simply be acquired. “We are super excited they decided to ‘go big’ with us,” Barrett said.
The playbook for the RTK.io integration will be similar to when Rubicon Project bought nToggle in July 2017 for $38.5 million. In both cases, Rubicon Project picked up a small player on the cusp of larger growth with a plan to productize the acquired company’s offering. With nToggle, that meant a “traffic shaping” product for DSPs. In the case of the RTK.io deal, Rubicon Project is already in market with a version of the product it’s acquiring.
The goal for Rubicon Project Demand Manager is to create an ad server-like product built on Prebid that allows the exchange to get a small cut out of every impression it helps manage, not just the impressions where it brings in revenue for the publisher.
Prebid is a neutral product with around 500 engineers working on it. “That’s the size of Google’s engineering team,” Barrett noted. Prebid-based Demand Manager allows “publishers and buyers [to] pick someone that is open source, independent and scaled.”
Buyers today care about accessing the lowest-fee path to supply, and Demand Manager stands to compete there. Publishers can pay a flat per-impression fee or a percentage of media for Demand Manger. So far, Barrett said publishers have favored the latter model.
Google’s competing open bidding product, which also manages multiple partners on behalf of publishers without a lot of extra legwork, charges 5% for display impressions and 10% for video and app impressions. Demand Manager is “cheaper,” Barrett said.
The choice to acquire RTK.io runs counter to what Rubicon Project’s investors would prefer, Barrett said, which is for the cash-rich company to buy back shares of its stock.
But acquiring assets that can make Rubicon Project a better company faster than through purely organic growth will drive more long-term value, he said.
“We think the best use of capital for investors is to drive opportunities to accelerate a product road map,” Barrett said. “This is the playbook.”