Supply-side platforms were born of a need. Publishers felt outgunned: ad networks were reselling inventory at a mark-up and taking margin that publishers felt rightly belonged to them. And buyers had a growing stable of ad technologies at their disposal.
But four years on, with the rise of realt-time bidding and ad exchanges, SSPs themselves are finding a new role. They were originally meant to juggle ad networks for the best yield. Now, that role is less important. And the question remains whether the promise they made to publishers — increase their yield on inventory — is being realized at all.
“Things definitely have not changed,” said Roy Schwartz, chief revenue officer at Politico. “SSPs are not the solution publishers need to deal with remnant inventory. I don’t see how they could be.”
That sentiment was echoed by many in the digital publishing industry. “There is a sense that we’ve been waiting for this business to be more,” said one current SSP client. “All of these yield-optimization companies, data-targeting companies, etc., they are great at selling,” said one top digital publishing executive. “But their impact is always hard to see.”
That doesn’t match up with the money flowing into this area. The Rubicon Project has swallowed $60 million in venture funding, AdMeld is in the midst of a $400 million acquisition by Google, PubMatic has taken another $18 million in VC cash.
PubMatic CEO Rajeev Goel naturally disagreed with these assessments. He pointed to the scale of dollars, which he estimated to be in the neighborhood of $500 million flowing to this sector, along with the quality of publishers employing SSPs, as well as Google’s pending acquisition of Admeld, as all helping validate the segment. “There is a very strong value proposition that SSPs are providing publishers,” Goel said.
The Rubicon Project is emblematic of the SSP business. Founded by serial entrepreneur Frank Addante, the Los Angeles-based company positions itself as nothing less than a publisher’s best bet against being dominated by Google. Rubicon handles 4 billion ad impressions a day, 120 billion a month. The ad tech company says it handles ad inventory for 20 percent of the 500 biggest sites on the Web — and 450 publishers overall. Across the globe, Rubicon works with over 600 buyers.
But it’s also suffered a rash of executive departures recently. Over the past few months, at least six vps have left the company. Some joined startups, like Ben Trenda, formerly vp of demand sales who is now head of sales at the startup iSocket, and some resigned abruptly, such as veteran Raleigh Harbour, svp of corporate and business development. Other departures include Bill McHargue, vp of publisher sales North America, who had been with Rubicon just a few months, Tom Weedon, vp of services/account management, Giuseppe Di Mauro, vp of engineering, and Chris Smith, vp of technology.
As it prepares for an IPO, Rubicon is now repleneshing with new executives, including ContextWeb’s Jay Sears, who has been named svp of marketplace development, and Jeremy Fain, a former CBS Interactive executive who has been brought on to serve as vp of client services. Such changeover can be viewed as bets against a late-stage company coming to fruition — or as the normal churn of a fast-growing tech start up.
Rubicon’s chief revenue officer Nick Hulse downplayed the management changes. “We’re having a record year,” he said. “We’ve hit it out of the park with publishers. We want to do the same with demand side.”
Rubicon manages two businesses: its yield optimization product for publishers (which helps them pick which ad network will make them the most money at a given moment), and its demand side product, which aggregates ad inventory from Rubicon publishers and sells it to agency trading desks like VivaKi, demand-side platform companies like Turn, and other ad networks.
There are some indications that the West Coast startup didn’t have enought media-oriented, New York execs. One Rubicon client described being in meetings where there were a series of Rubicon executives present — and it was difficult to tell who actually did what at the company. “With bringing on people from NBC and CBS, it looks like they know they need to get more publisher-centric,” the client said.
Rubicon does claim several top media companies as partners, including NBC Universal and Time Inc. But it is difficult too find many others. But when pressed on just who makes up the company’s roster of ComScore 500 partners, officials at Rubicon often cite partners such as News International, which is mostly focused outside the U.S. and Career Builder, a big site, but not traditonally thought of as an online ad powerhouse.
Jason Lindgren, Careerbuilder.com’s senior manager, ad operations, said that working with Rubicon has helped the company sell to more small advertisers, while avoiding the labor involved in managing ad networks. Lindgren went as far as saying Rubicon’s effectiveness put pressure on his company’s premium sales team to lift margins.
“Our sole purpose for bringing in Rubicon was to segment our business, so we could focus on what our core competency was,” Lindgren said. “We didn’t want our direct sales force focusing on small businesses that would be here one day and gone the next. Now we think of them as an extension of our sales force. They bring up my floors. It brings everybody’s game up.”
Still, it’s worth noting that prior to its Google acquisition, Admeld had made major headway into the burgeoning private exchange sector, as it helped build such invite-only ad exchanges for Rubicon client NBCU, CBS, Weather and quadrantOne — a joint venture between several newspaper giants. However, Rubicon can claim a victory on this front. The company just reached an agreement with Forbes.com to build a private exchange (it’s also worth noting that the money in the private exchange sector is tiny, for now).
Rubicon definitley has its fans in the DSP and network world. “They are a good partner,” said one DSP exec. “My sense is they are upgrading their team.” And the company can claim to have facilitated campaigns for top advertisers, including Procter & Gamble, Coca-Cola and McDonald’s.
As for whether publishers are dissatisfied with Rubicon, or the SSP promise overall, Hulse disagrees. “Very large publishers value what we offer,” he said. “We create a very, very safe environment for brands. And publishers want that revenue lift.”As long as that lift is more than going from $1 CPMs to a $1.50 CPMs. Said one publisher, “I’ll starve on $1.50.”
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