The Rubicon Project, one of a spate of technology-focused companies that have helped bring order and structure to the sea of online advertising networks that have flooded the marketplace over the past
several years, is making a bid to do the same thing for the rest of the "non-guaranteed" advertising inventory managed by online publishers. Rubicon this morning released REVV, a new version of its
advertising management platform that gives publishers the ability to automatically manage, analyze, optimize and reap the highest possible revenue yields from all of the third parties and
intermediaries that are now handling facets of their advertising inventory that are not sold directly by their own internal sales organizations.
The move should not come as a complete
surprise. Rubicon Founder and CEO Frank Addante has been hinting at his desire to expand the role it plays in managing the messiest components of publishers' online advertising businesses, and many of
Rubicon's biggest publishing clients have helped it develop beta versions of components that comprise the REVV platform.
Other so-called "ad optimization" firms that compete with Rubicon, such as
PubMatic and AdMeld, are expected to follow suit, but Rubicon, founded in 2007, has a running start and is well capitalized. It just closed on a $43 million round of funding from big venture capital
firms including Clearstone Venture Partners, Mayfield Fund, IDG Ventures and GE/NBC Universal's Peacock Equity Fund.
It has been using those funds to both expand internationally and to invest in
the development of technologies that automate and simplify much of the processes publishers use to manage the disparate array of third parties that have emerged in recent years to represent their
unsold ad inventory, including advertising networks, ad exchanges, rep firms, audience data and targeting firms, etc., which has made that a chore in and of itself, creating a market opportunity for
Rubicon and others to step in.
In some ways, Rubicon was always a sleeper play: Start with an overly complex and somewhat unmanageable part of a publisher's business - the management and
optimization of its ad network relationships - and then expand into other troublesome areas.
Troublesome indeed. According to various marketplace estimates, as much as 80% of the online
publishing industry's inventory is now managed or influenced by a third-party intermediary other than the publisher's own internal sales organization. But it's been an 80/20 rule of sorts, with the
preponderance of a publisher's revenues coming from the 20% of the inventory it sells in-house. That direct sales inventory is typically referred to as "premium," because it involves creative
concepts, and human interaction between publishers, advertisers and agency executives to execute them, and is not seen as something that might soon, if ever become automated.
But the
stratification of the marketplace has created a slew of ancillary markets that are ultimately broken down into three sales channels: premium (or a publisher's own direct selling efforts), non-premium
(inventory sold by third-parties for a lesser value), and remnant (unsold inventory sold at the bottom of the marketplace, and a fraction of the premium CPM). That stratification has created a sales
channel dilemma for publishers who fear their non-premium and remnant sales might negatively impact the value of their premium sales, and is one of the reasons why Rubicon has created its new
management platform - to help publishers keep an eye on, and to influence how other third parties touch and value the balance of their inventory.
Like its original ad network optimization system,
Rubicon charges a percentage fee on the inventory it facilitates through its new, enhanced systems. Those percentages are negotiated, and vary based on the mix of technologies, services, and platforms
a given publisher is using, but in its most extreme, Rubicon executives said it could total as much as 25% of the revenues generated by a publisher utilizing Rubicon's systems.