Surge In Mobile Revenue For Rubicon Project In Q3 – And Hints Of Greater Transparency

Rubicon mobile Q3 2015Mobile now makes up more than a quarter of Rubicon Project's revenue, according to the company's Q3 earnings report Tuesday.

Twenty-six percent of revenue comes from mobile, and 74% from desktop. That’s up from 22% last quarter and single digits in years past. President Greg Raifman called that channel growth the “tip of the iceberg.”

Mobile growth represents a payoff for Rubicon's recent mobile partnerships. Those deals include a mobile ad exchange and native ad server it created in partnership with inMobi, and a location data partnership with xAd back in April.

Rubicon’s "Orders" private marketplace business has also seen an uptick in mobile demand, since premium supply on mobile is hard to come by outside the Facebook and Google ecosystems. The company said mobile orders grew 96% quarter over quarter, but didn't disclose from what base.

Overall, Rubicon posted strong growth year over year. The amount of money flowing through the platform, or managed revenue, grew 45% to $244.4 million. Net revenue grew 80% to $57.9 million.

Take rates, defined as net revenue divided by gross revenue, also grew from 19.1% to 23.7%, reflecting Rubicon’s acquisition of buy-side platform Chango, which Rubicon implied had higher margins, driving up the take rate. But Rubicon said those take rates would soon go down.

In the buyer cloud, built on the acquisition of Chango, Rubicon plans to “proactively test new pricing models for greater transparency for brands and agencies,” Raifman said, stating that it will “give us a competitive advantage" and deepen relationships with customers.

Those new pricing models could be an enterprise or software-as-a-service model instead of a percentage of media spend.

In the call, Rubicon addressed two more hot topics in the industry: header bidding and ad blocking.

Rubicon touted the release a few months ago of a second-generation header-bidding product, dubbed Fast Lane. Average CPMs for its sellers using header bidding were 50% higher than CPMs achieved in non-header-bidding setups.

As for ad blocking, CEO Frank Addante said that the company would roll out a product to publishers and application developers that would address the two main reasons why users install ad blockers: slow load times and disruptive experiences. He wouldn’t give a timeline for the product release beyond saying it would happen in the “near future.”

 

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