Rubicon Project CEO: ‘Open source will be the gold standard’
Soon after it emerged Rubicon Project is mounting a counter-charge to its ongoing legal tussles with The Guardian, The Drum caught up with its chief executive Michael Barrett to gauge his priorities for his first three months in office.
Rubicon Project's leadership won’t be drawn on record for any comment over its pending legal issues with, although it’s understood throughout the industry that transparency with pricing is now table stakes.
Rubicon Project is embracing an open source future as part of its turnaround plan which also includes potential acquisitions
The discussion covers: how the dominance of the duopoly is arguably the company’s biggest life-line; how open source code will lead to a more equitable system; plus potential future acquisitions in his turn around plan.
Barrett joined the publicly listed adtech outfit at a tumultuous chapter in its 10-year history, with Barrett himself directly replacing company co-founder Frank Addante (now chairman) in the hot seat, amid publicly posted revenue declines, as well as a restructure and legal issues.
Although the adtech veteran remains upbeat as to the company’s prospects, and the turnaround plan he’s currently executing. Below are edited extracts from the conversation.
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The Drum: What has been your top priority since taking over Rubicon?
Michael Barrett: It’s been fun getting in touch with clients, by doing that you’re also meeting all the folks at Rubicon, getting feedback from them, and then getting an idea of the things we’re doing right, and ways we can improve.
Obviously, there’s been a narrative about Rubicon, and generally speaking the feedback has been pretty consistent. There was concern around turnover at the company (some of it was by design) and then there was that whole series of rumors about Rubicon being acquired. That upset clients because if you need Rubicon as a standalone, independent company that’s not going anywhere [as a public company], then you could bet on that as an independent tech stack. So those things [rumors] were unsettling to them.
Obviously, us being late to header bidding – regardless if that was well thought out internally and discussed – I think clients perceived that as a lack of awareness. But the clients were like: ‘We asked you, and you were slow’.
That’s the narrative I saw going into it, and so the feedback wasn’t alarming. The positive was that every client wanted an independent alternative [to Google and Facebook]. By that I mean they want someone that just sticks to the plumbing and transacting, and not creating inventory that could be in competition with publishers, or sending sales teams out to source ad dollars that would put you in competition with the buyers. So we want to just stay there and make the transactions happen in a transparent environment.
People want choice, but I don’t think they [publishers] want 400 players in the market any more, but certainly we know that publishers can be very facile with their use of vendors, but having a globally scaled, independent choice out there is what’s desired. I’m not saying we’re the only one out there, but that’s certainly where I and the team want to get back to.
The Drum: When you mention ‘independent’ alternatives to ‘the duopoly’, what is the Rubicon Project position on the recent adtech consortium geared towards establishing an ‘open ID’ framework?
Michael Barrett: We’re very supportive of it, we were reluctant to throw everything in [at launch] because everything was a bit unsettled in terms of the governance of the coalition, that should be announced in the next couple of weeks, and you’ll see us playing a big role in it.
My CTO Tom [Kershaw] believes that the industry has reached a point of maturation that open source is the gold standard from a transparency perspective. With code being shared everyone will see the auction mechanics, and see how it works, it will make for a more equitable system.
My take is a little more customer-centric, we have to be where our clients want to be. So even if we might have a difference of opinion on the way Google or Amazon do theirs, this isn’t the time for us to sit back and lose the market. So I think we’re going to participate in the big initiatives and bring our weight and buying power to it as well.
The Drum: During the most recent Rubicon Project earnings call, header bidding was mentioned extensively, in particular how the move to open source, server-to-server execution would turn it from a disadvantage to a positive. However, if the source code is open, then how will that become a competitive advantage to your company?
Michael Barrett: That’s an interesting question, and it’s a work in progress. If someone were to say to Rubicon Project two years ago that ‘in the near future, you will be able to see all the inventory that Google sees’; they’d have said ‘we’ve won, job done.’
Now that’s happened and we were late to the first wave of it, our job is to get to parity and be able to plug into all the publishers we’ve historically worked with, and then optimize those pipes and make sure everything is flowing correctly.
At that point we’ll fight like we did before. No one handed Rubicon their place in the waterfall, there were 10 other folks trying to get that place. Over time, it was Rubicon’s power in the marketplace that came through technology, scale, curation of the marketplace and variety of buyers. For instance, we had over 130 DSPs [demand-side platforms], when most people would stop at about 30. All those things that helped us in the old world aren’t going to go away in the new world.
I think you’ll see phases of header bidding, I think you’ll see a phase where everyone will be able to plug in and see the same impression from about 15 different places. That’s when you’ll start to see vendors say ‘that’s too much’, and then there’ll be a collapse. So as it matures, there’ll be a selection process that and you will see the buy-side realize they don’t have to plug in to 15 different buys of inventory, and then just pick the top guys they want. And I think we’ve always had really strong relationships with that side.
Bid duplication and the move to server-side header bidding is crushing them [DSPs] from a cost perspective. Having access to more supply (where they could see the same person in a different environment for a cheaper price,) was previously a USP for them. But value proposition is going to diminish over time, as you’ll be able to plug into a handful and still see everyone.
Generally speaking, I think that’s getting to parity, and that’s where we can use the legacy of Rubicon to move into a leadership role. And there are things we’re going to have to develop such as tools and services that are more appropriate for this server-to-server world. So with our balance sheet and the technology chops that we have, I think that’s where we can start to develop differentiation.
Some things are in development and we’re looking at some things from an acquisition standpoint. But I think that anything that can live on the edge, and not go [too] far; so we’re not going to be a buyer, or a seller but things that can make sellers sell better in this world, and make buyers more efficient; those are things right up our alley.