Home Publishers Rubicon Project Sheds Light on Ad Networks and Exchanges

Rubicon Project Sheds Light on Ad Networks and Exchanges

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On Tuesday, ThinkPanmure analysts Bill Morrison and Robert Coolbrith hosted an investor call with Frank Addante, CEO, The Rubicon Project. The Rubicon Project goal is to optimize ad network and ad exchange relationships for web publishers and increase their effective CPM for remnant display advertising – or “make mad cash” as Rubicon likes to say.

More info from ThinkPanmure:

The company currently has approximately 1,300 publisher customers and optimizes approximately 11 billion advertising impressions per month (representing 240 million unique Internet users worldwide), providing Rubicon with a relatively unique view on non-premium display pricing and volume trends.

Rubicon is also well-known for its over-the-top booth at AdTech San Francisco in April of this year.

There must have been a hundred Rubicon supporters, employees and other ne-er-do-wells with their black t-shirts swirling about the Rubicon spaceship on the show floor. In that Rubicon appears to target Long Tail publishers primarily, it seemed odd that they would have such a huge booth at a show targeting large publishers, but they do claim to work with 4 of the top 5 newspaper publishers. Were they trying to sell the company? Initiative aimed at large pubs? Dunno.

But, we digress.


From the notes on the call with Morrison and Coolbrith, Addante provided insight on current CPMs in remnant display and, happily, the news was good with caveats – and in the face of negative online advertising analyst predictions.

Addante said that Q2 eCPMs increased 7% year over year and added that Advertising.com and ValueClick continue to perform well. In particular, ValueClick, which ThinkPanmure covers, has apparently become creative in its offerings to advertisers and consquently publishers are seeing the benefits – i.e. behavioral targeting, vertical networks, new technology, etc. Given the flood of remnant display out there, the eCPM increase sounds good to us.

On the exchange front, the opinion from Addante was that advertising exchanges (Right Media and DoubleClick AdX were mentioned) are not having a significant impact yet on the “yield management paradigm.” Addante offered two primary challenges for the ad exchange model:

1) failure as a pricing mechanism due to sizable demand/supply mismatch in current exchange incarnations, and 2) established ad networks continue to balk at the radical changes to their business models and operating procedures that would be required to work with ad exchanges, thus, limiting the pool of demand available to the exchanges (and contributing to the demand/supply mismatch).

We take #1 as a liquidity issue that will be overcome in time. We’re curious about how the auction-based, dynamic model of exchanges works with yield management tools of companies like Rubicon Project – especially given the dynamic nature of the exchanges where bid/offer pricing is constantly changing.

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Also of note was Addante saying that RightMedia was having latency issues as has been reported.

And finally, we enjoyed this summary from Addante: what do publishers want from their ad network and exchange relationships? Addante says:

    1. Ad quality
    2. Latency/network performance
    3. Revenue

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