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Rubicon Project Technology Transparency

Rubicon Project will drop buy-side fees as part of its ongoing transparency drive


By Ronan Shields, Digital Editor

November 2, 2017 | 5 min read

Adtech outfit Rubicon Project has announced that it is to cut all buy-side fees as its recently installed leadership team aims to make good on its promise to be “the supermarket of programmatic.”

Rubicon is using machine learning to determine whether first-price or second-price auction should be deployed

Buy-side fees had accounted for over half of Rubicon Project's revenues

Speaking with The Drum ahead of its Q3 revenue report, Rubicon Project chief executive officer Michael Barrett, said the move was made to distinguish itself in an overcrowded market, and that the decision was arrived at after management that continuing to charge both sides of the market was too confusing a proposition.

From November 1, Rubicon has decided to drop all buy-side fees that take place on the Rubicon platform, with Barrett explaining his theory that this will distinguish the adtech outfit as a “low cost option”, or “supermarket”, of programmatic inventory.

“We’re eliminating all buy-side fees, I think it’s a really important step for not just us, but the industry. We made a pledge earlier this year, when I arrived to focus on transparency. I want to know that if you put a dollar to work with Rubicon, just how much of that is going to working media,” he said.

Barrett further explained his theory that Rubicon’s leadership believes that dropping buy-side fees will equate to more spend, but declined to comment on when he expected the anticipated increased interest in the buy-side would eventually offset the axing of this revenue stream.

This is in accordance with the publicly-listed company’s policy of suspending revenue guidance, although he did add that “more spend will mean more revenue for publishers” as the dropping of the buy-side fees will mean that buyers have more money to spend on media.

Buy-side fees had formerly accounted for over half of Rubicon’s revenue stream, but Barrett spoke of his belief that its latest policy decision will lead to increase ad spend, and impressions on its platform, as there will be “bigger budgets for buyers to put to work in the programmatic world.”

In a statement sent to The Drum, Lewis Rothkopf, general manager of supply at buy-side adtech outfit MediaMath, spoke about how a more transparent fee structure would bring some much needed clarity to the operations of the supply chain.

“Today’s announcement will further enable our clients to efficiently purchase impressions and audiences that are most valuable to them while gaining greater visibility into the supply chain," he said. "

Our True North is helping buyers achieve their best possible marketing outcomes by maximizing the value of every dollar spent, with transparency as a design principle, and we’re pleased to partner with Rubicon Project on this initiative in furtherance of that goal.”

The decision demonstrates Rubicon’s decision to rely on unique demand in a market where much of the technology on offer is increasingly commoditized, and buyers can access the same inventory on a number a platforms, this is increasingly the case given the widespread adoption of header bidding among publishers, according to Barrett.

Speaking during the company's Q2 results call, Barrett, fleshed out his strategy to analysts: "We're working towards becoming the lowest total cost-per-transaction providers for buyers and sellers and continuing to improve win-rate with the addition of nToggle's technology to our platform."

The adoption of more transparent policies has been a key feature of Barrett's leadership of the company, which began in March this year, with the company recently offering buyers and sellers the option to transact using first-price auctions, as well as conducting further experiments with auction dynamics.

This ongoing commitment to transparency can be viewed as a reaction to the negative publicity that engulfed the company following the revelation that The Guardian was pursuing legal action against it for undisclosed fees, albeit, these are charges that Rubicon is contesting.

Rubicon Project Technology Transparency

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