Monday, October 8, 2007
Interview with Frank Addante, Rubicon Project
Rubicon Project (www.rubiconproject.com) is launching a beta of its web advertising system today, and is looking to provide tools to publishers to take full advantage of the many advertising networks out there. The firm has a great pedigree--the founder, Frank Addante, who was formerly Chief Technology Officer and a founder of L90. We spoke with Frank about the company and what it hopes to do for the web advertising market. Frank spoke with Ben Kuo.
Tell me a little bit about where Rubicon Project fits into the online advertising world?
Frank Addante: This company is my sixth company. Of the five companies I've started, two companies were acquired, one had an IPO, and one was a failure and a learning experience. My last company was StrongMail. You probably remember my third company, L90--DoubleClick was our biggest competitor, and we were the seventh horse in a seven horse race. We built an advertising platform, adMonitor, were able to raise $112M in an IPO, and were eventually acquired by DoubleClick in 2001.
For Rubicon Project, I reconnected with the team which built adMonitor for me. I looked at the advertising space, and saw that not a whole lot had changed. There was just more--more ad dollars, more web sites trying to make money, more ad networks, and a whole lot more confusion in trying to sell ad space. I identified two trends--one, was the trend that websites are lacking technology to be able to monetize their ad inventory. The second trend, is all these ad networking popping up everywhere. From Google AdSense, to Tacoda, to AdBrite, to 24/7, to HispanoClick in Mexico--there are 300 ad networks. Seven years ago, there were fifteen ad newtorks. Two years ago, there were 150 networks--now there are 300. There are large networks, small networks, CPA networks, CPC networks, local networks, networks focused on certain geographies, a sports network, a woman network, a gay ad network. And, the fact is, the advertisers are spending dollars with all of them. There are more dollars in more places. This is fine for advertisers, but if you're a publisher--what do you do? Publishers only have the capacity to work with one or two, maybe three ad networks. They can only reach a limited amount of the market. We're providing solutions for publishers to gain more complete access to the total available market. We are hooking them up to ad networks which are as relevant as possible. It gives them more exposure to advertisers and ad dollars. It's a self service solution--you can be up in fifteen minutes and running. What our technology essentially does, is it breaks down and deciphers inventory, and looks at demographics, context, and geography. We then match up the best ad network to each impression, to make them the most amount of money for a particular ad.
It seems very crowded in the ad space--There are lots of companies in the online advertising world, with many established players--how is Rubicon Project different?
Frank Addante: That's the thing. It's a crowded space, but that's for advertisers. It's not for the companies providing technology to publishers. For them, it's just the opposite. If you're a publisher, there are not too many places to go for technology. With all of the acquisitions that have been done--DoubleClick, Right Media, Blue Lithium--now there are less independent solutions for publishers. It's quite the opposite--it's not a crowded space for technology for publishers, which is why we decided to go into it and provided solutions publishers with a way to make more money on their ad space.
Speaking of money, are you taking a cut of revenues--or how what's the model behind this?
Frank Addante: Right now, we're going to enter our beta phase. One thing we want to do, is get feedback from publishers. We're going to limit the beta to about 500 publishers. One thing we want to learn is what is the best revenue model to commit to. There's so much inefficiency in the advertising world today, that 80 percent of the ad space on the internet goes unsold. Plus, if you look at publishers, that is in an inefficient way. For example, 30 - 50% of U.S.-based sites have traffic coming in the form of international business. They're taking that traffic and sending it to U.S. ad networks, which is almost like throwing those impressions into the trash. We think we will help efficiency that we'll be able to make money on the upside, performance-based.
One things our readers might be interested in hearing about--you've spent some time up in the Bay Area, and in fact I remember you moved your last startup up north. Why did you come back to Southern California?
Frank Addante: I moved StrongMail up north, thinking that there was where all the talent was. Right after I moved north, I began seeing fantastic companies build in LA--such as MySpace, Shopzilla and LowerMyBills. I realized it was just the opposite. There is a ton of talent in Southern California. And those people are fantastic--when I started L90, we had hundreds of people here. So locating back here was a talent issue, to be able to tap into the talent pool here in Southern California.
Where are you now in terms of where your product is?
Frank Addante: The product is ready and built. We're running on some significant sites, and we have seen extremely positive results so far. Originally, our plan wasn't to launch into beta until the end of the year, but that whole plan accelerated to because we were able to work much faster than planned. We're putting up the beta site on October 8th, and that's when publishers will be able to get in and look at our beta program. We're taking 500 publishers, and it will be off to the races from there.