clearstone

What is the Rubicon Project???

October 2nd, 2007   |   by Frank Addante

OK, I know I haven’t posted in a while but, I’m hoping I can make it up to you with a change that I am making in the style of this blog. (By the way, thank you to all of you that I have sent emails letting me know that you miss my regular posts, it keeps me motivated to keep writing.)

The reason that I haven’t posted in a while is because we’re preparing to finally start talking about what we do here at the Rubicon Project. It’s been really hard to keep quiet about something I love doing, so I’m really excited to tell you all about it!

A New Vision for This Blog:

Before I get into that, as I alluded to in a previous post, I want to tell you about my new vision for the blog. To date, I have been posting more “lesson-oriented articles”. I don’t post as often as I’d like given the demanding lifestyle that comes along with building a new company. It doesn’t allow me to dedicate much time to the blog. So, I decided that I’m going to change the blog to be more “in the moment” versus “article style”. As I set out to build this new company I am going to give you a peek into my daily life, the lessons I learn and insight into the decision-making process as it happens. I will post more frequently, but less formally. I may post something before a meeting, after a meeting, perhaps even during a meeting or even while boarding a plane… I don’t know how it will work out, I’m just going to go with it and see how you like it.

the Rubicon Project Funding Announcement:

So… about the Rubicon Project… First off, I have a confession to make. Five months ago, we raised a round of venture capital. We’ve raised a total of $6 million, $4 million in equity funding from Clearstone Venture Partners and $2 million in venture debt from Square1 bank. Clearstone’s capital was used to incubate the company and develop the product. They are one of the best investors I’ve worked with. They have a strong entrepreneurial spirit and are very supportive. Square1 bank is a newer bank with a fresh approach and are entrepreneurs at heart. I didn’t want to announce the funding earlier because I’m not a big fan of talking about what we’re “going to do”, I prefer to talk about what we “have done”.

When we started the company in May, our original plan was to launch the product in April of 2008. We didn’t plan on talking about what we’re up to until later this year. But, things have moved much faster than we expected. In fact, we’re going to be launching our private beta invitation site next week on October 8.

Today, I’m going to tell you a bit about the problem that we’re solving. Next week, I’ll dive more into the solution. Then, I’ll move along into more frequent postings to give you the play by play.

The Problem with Internet Advertising:

My founding team is a group of industry-experienced, aggressive and passionate renegades that are dedicated to bringing a new level of efficiency to the fragmented internet advertising space. We shook up the online advertising industry in 1998 when we created L90/adMonitor, one of the most successful internet advertising platforms that served over 3,000 of the web’s most recognized sites, reaching 65% of the internet population before DoubleClick acquired it.

Before starting the Rubicon Project, I talked to about 100 websites about their challenges with internet advertising. I learned that even though $27 Billion was spent advertising online in 2007, it’s still too hard for websites to sell their ad space online. While internet advertising is an explosive market, it is an incredibly inefficient one with advertisers spending money with 300+ disparate advertising networks worldwide (e.g. Google AdSense, Yahoo! Publisher Network, Tacoda, HispanoClick and Adtegrity).

From my conversations, I discovered two trends: first, there is a lack of advertising technology solutions for website publishers; second, there has been a rapid growth of advertising networks. Seven years ago, when I was in this business, there were 15 ad networks. Two years ago, there were roughly 150 and today there are over 300!

There are small and large networks; CPA, CPC and CPM networks; text, display and video networks; local networks and international networks, broad networks and very niche networks. The point is that there are a lot of ad networks, all with different strengths. Advertisers are spending money with all of them. Some more, some less, but if websites want to maximize the revenue potential of their ad space, they need to be able to tap into and access all of them.

Case in point, between 30-50% of U.S. based websites’ traffic is coming from international visitors. If a site isn’t sending that (international) traffic to an ad network that has international advertisers, it’s like they’re throwing those ad impressions in the trash.

It is absolutely shocking to me how inefficient and manual this market is. The best way for me to describe it is that it’s like the stock market without a NASDAQ system. Surprisingly, most business in the advertising world today is transacted via Excel spreadsheets. It needs to be automated.

In order for web sites to make the most money from ads on their site, they need a simple solution to access and manage all of the places that advertisers are spending money (these 300+ ad networks). To make that management effortless, they need smart technology that understands the strengths of all these networks and automatically deciphers every ad impression (using demographic, geographic and contextual information) to match each impression with the best money-making opportunity. Guess what we’ve built?

Private beta site coming next week. More then…



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