Pioneers of Advertising Automation - Leading the Automation of Advertising
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Leading the Automation of Advertising
Pioneers of Advertising AutomationSafe Harbor These materials and the accompanying oral presenta3on contain “forward-‐looking” statements, including statements that are based on our management’s expecta3ons, beliefs and assump3ons and on informa3on currently available to management. Forward-‐looking statements include all statements other than statements of historical fact, including informa3on concerning our future financial performance, business plans and objec3ves, poten3al growth opportuni3es, development of our technology and new offerings, business mix, financing plans, compe33ve posi3on, industry environment and market condi3ons and opportuni3es, poten3al market opportuni3es and growth rates, territorial expansion, opera3onal measures including managed revenue, paid impressions, average CPM, and take rate, benefits to clients, and other plans and expecta3ons of management. Forward-‐looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertain3es, and other factors that may cause actual results to be materially different from the expecta3ons or results projected or implied by the forward looking statements. These risks include, but are not limited to, increased compe33on; our ability to grow rapidly and manage our growth effec3vely; develop innova3ve new technology and bring new solu3ons to market quickly; aJract and retain buyers and sellers and increase our business with them; use our solu3on to purchase and sell higher value adver3sing and to expand the use of our solu3on by buyers and sellers u3lizing evolving digital media plaLorms, including mobile and video; maintain a supply of adver3sing inventory from sellers; and the effect on our business of, evolving legal standards and regula3ons, par3cularly concerning data protec3on and consumer privacy. Moreover, we operate in very compe33ve and rapidly changing environments, and new risks will emerge. It is not possible for us to predict all risks or to assess the impact of all factors on our business or the extent to which any factor, or combina3on of factors, may cause actual results to differ materially from those contained in any forward-‐looking statements we may make. We discuss these risks and addi3onal factors that could cause actual results to differ from those suggested by forward-‐looking statements in the “Risk Factors” sec3on and elsewhere the prospectus that we filed with the Securi3es and Exchange Commission (“SEC”) on April 2. 2014 pursuant to Rule 424(b) under the Securi3es Act. You should not rely upon forward-‐looking statements as predic3ons of future events. Neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-‐ looking statements. We undertake no obliga3on to publicly update any forward-‐looking statements for any reason a[er the date of this presenta3on to conform these statements to actual results or to changes in our expecta3ons, except as required by law. In addi3on to the U.S. GAAP financials, this presenta3on includes certain non-‐GAAP financial measures, including related to adjusted EBITDA. There are a number of limita3ons related to the use of these non-‐GAAP financial and opera3onal measures versus their nearest GAAP equivalents. First, adjusted EBITDA is not a subs3tute for revenue. Second, other companies may calculate comparable measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-‐GAAP measures as tools for comparison. Finally, adjusted EBITDA excludes certain non-‐cash and non-‐opera3ng charges, including non-‐cash stock-‐based compensa3on and deprecia3on and amor3za3on expense, which are recurring. Therefore adjusted EBITDA does not reflect the non-‐cash impact of stock-‐based compensa3on or working capital needs, that will con3nue for the foreseeable future. A descrip3on of the non-‐GAAP financial measures and a reconcilia3on of those measures to the most directly comparable GAAP financial measures is provided in the accompanying appendix. CONFIDENTIAL | 2
RUBI is elite 4% of public companies &
growing faster than market.
Only 4% of Public Companies Critical Position as Seller’s
collectively have: Platform
> $100M revenue > $600M managed revenue
> 40% growth 600M+ global consumer reach
AEBITDA positive Hundreds of websites & applications
All major DSPs, ad nets, agencies
Recurring, sticky revenue
Ad tech is reliant on RUBI exchange.
Source: Zack’s Investment Research Stock Screener
CONFIDENTIAL | 3Automating advertising is fast-growing,
$100Bn opportunity
50%
Global
RTB
Spend
2011-‐2017
($Bn)
~$300Bn $20.8
$14.5
Automated
~$200Bn $9.9
2014
$6.7
$4.5
$2.7
$1.4
2017
2010 2011 2012 2013 2014 2015 2016 2017
Sources: PriceWaterhouseCoopers Entertainment and Media Outlook 2013-2017 (market size includes TV, Display, Video, Mobile), IDC, Real-Time Bidding in the US and Worldwide 2010-2017, Internal Estimates
CONFIDENTIAL | 4Marketplace confusion and manual effort limit
growth of digital advertising
1000’s of Choices
SELLERS ! BUYERS
! Brand &
!
Data
60% Safety $40K
Tax to Execute
Campaign
Sources: Credit Suisse, Web 2.012, Bionic Advertising Systems
CONFIDENTIAL | 5RUBI provides Sellers a single platform to manage
100’s of DSPs, Ad Networks & Agencies
DIRECT Agencies
ORDERS
$43Bn
DIRECT
SALES
Market Size
(orders)
600M SELLERS
REAL
TIME $7Bn DSPs 100,000+
Consumers BIDDING
Advertisers
Market Size
INDIRECT
SALES
(auction) STATIC
BIDDING $10Bn Ad Nets
Market Size
Sources: PriceWaterhouseCoopers Entertainment and Media Outlook 2013-2017, IDC, Real-Time Bidding in the US and Worldwide 2010-2017, Advertiser Perceptions, Advertiser Intelligence Reports Wave 17
CONFIDENTIAL | 6DSPs, Ad Networks and Agencies need RUBI
exchange for automated access to Sellers
DSPs
Ad
Networks
Consumer
Visits BIDS
Website & ORDERS
ADVERTISING Agencies
EXCHANGE
Advertisers
þ 100’s of bids per visitor
Elapsed Time:
þ Enforce seller pricing rules
80ms
þ Security & quality check
þ Winning bidder selected
CONFIDENTIAL | 7Massive Tech: Speed, science, security and data
drive top performance for customers
PROPRIETARY MACHINE BUYER &
BIG DATA
LOW LATENCY LEARNING SELLER
INTELLIGENCE
CLOUD ALGORITHMS SECURITY
30,000+ CPUs Exchange algorithms 4 trillion bids/month Security technology
Custom engineered Buyer & seller matching 2 million/second protects sellers’ and
hardware & chips Unified auction 6 petabytes of data buyers’ brands.
2X QPS of Amazon S3 Pricing 600 million consumers
CONFIDENTIAL | 8Software model, evolved.
Recurring, sticky – fees are % of customers’ revenue
V1 V2 V3
High upfront license, 20% SAAS monthly fee % of revenue
maintenance per seat/usage transacted
(e.g. PeopleSoft) (e.g. salesforce.com) (Rubicon Project)
Seller App Usage
Volume Buyer App/API Usage 18% avg.
driven Data fees
Transaction Processing
CONFIDENTIAL | 9Rapid revenue growth
Annual
Managed
Revenue
Annual
Revenue
($MM,
FY
ended
December
31)
($MM,
FY
ended
December
31)
$84
$485
$339 $57
$239 17.3%
16.8% $37
15.5%
2011 2012 2013 2011 2012 2013
TAKE
RATE
Growth
42%
43%
Growth
54%
47%
CONFIDENTIAL | 10Growth of buyers; DSP’s, Ad Networks & Agencies
= growth for RUBI
Advertisers
Advertising
Exchange
Publishers Application Developers
CONFIDENTIAL | 11Automated advertising is growing fast,
RUBI is growing faster
RUBI:
282%
RUBI:
75%
RTB Market: 123%
RTB Market: 50%
2010 2013 1H 2013 1H 2014
CAGR CAGR
Sources: IDC, Real-Time Bidding in the US and Worldwide 2010-2017, Internal Data
CONFIDENTIAL | 12Growth accelerated in Q2
Q2
Managed
Revenue
Q2
Revenue
Quarterly
Revenue
($MM)
($MM)
$28 ($MM)
$154
$28 $28
$113 $19
$23
$19 $20
$76 $13 $19
$17
18.4%
$14
$13
17.0% 16.9% $11
Q2 2012 Q2 2013 Q2 2014 Q2 2012 Q2 2013 Q2 2014 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14
TAKE
RATE
Growth
48%
36%
Growth
46%
49%
YOY
Growth
54%
46%
45%
45%
39%
49%
CONFIDENTIAL | 13RUBI growth rate + replicating share in adjacent
markets leads to multi-billion Managed Revenue
Potential Market Size ($B) Rubicon Project
Market Share Capture: Managed Revenue ($B)
$6.9
B
$6.9
$301
15%
$281
3%
$259
Display
$242
RTB Mobile
15% $3.9
1%
Display
TV
Orders
3% $1.5
Desktop 6%
$0.7
Other Video
Display
RTB
Display
Orders
Display
Other
Display
RTB
Display
Orders
Display
Other
Mobile
Video
TV
Mobile
Video
TV
Sources: PriceWaterhouseCoopers Entertainment and Media Outlook 2013-2017, company internal estimates- Managed Revenue is an operational measure that represents the advertising spending transacted on
our platform and would represent our revenue if we were to record our revenue on a gross basis instead of a net basis.
CONFIDENTIAL | 14Expanding products and markets
Annual
Managed
Revenue
by
Product
Annual
MR
by
Region*
2011 2012 2013 2011 2012 2013
North
America
Interna3onal
Sta3c
Tag
RTB
Orders
Mobile
*
Based
on
Seller
LocaLon
CONFIDENTIAL | 15Culture is our #1 priority:
Culture attracts great innovators & leaders
Pioneers of ad server, paid search, RTB
Todd Tappin
COO/CFO
Frank Addante
CEO, Founder and
Greg Raifman
President
Top 3 were founders/execs of public cos.
Chief Product Architect
Deep engineering & scale leadership
Brian Pike Neal Richter, Ph.D. Tony Katsur Kaylie Smith Mari Kim Novak
Chief Technology Chief Scientist Head of Head of Chief Marketing
Officer Buyer Cloud Seller Cloud Officer
Jay Stevens David Day Tim McQuillen Josh Wexler Brian Copple
Head of Chief Accounting Chief Knowledge Head of General Counsel
International Officer Officer 49BC
CONFIDENTIAL
|
16
CONFIDENTIAL | 16RUBI is the superior solution for Sellers,
required for Buyers
CONSUMER
SELLER
STATIC
DIRECT
NO
TECHNOLOGY
INDEPENDENT
RTB
BIDDING
ORDERS
TRANSPARENT
ARBITRAGE
BUSINESS
REACH
INTEGRATIONS
Rubicon
Project YES Top 5 YES YES YES YES YES YES YES
Google*
(* is customer) NO Top 5 YES YES YES YES NO NO MIXED
Facebook
Exchange NO Top 5 NO YES YES NO NO NA NO
SSPs YES NA YES YES NO YES NO NO YES
DSPs ViaDSPs ARE CUSTOMERS OF RUBICON PROJECT
Via EXCHANGE
YES Exchanges NO YES NO Exchanges MIXED MIXED NO
CONFIDENTIAL | 17Commonly asked questions
QUESTION ANSWER EXPLANATION
Is RUBI a DSP? NO DSPs are Customers
RUBI is an Exchange and has full SSP
Is RUBI just an SSP? NO
capabilities
Is RUBI just remnant? NO RUBI apps service all inventory
RTB ($7Bn market) + Static Bidding
Is RUBI just RTB? NO
($10Bn) + Direct Orders ($49Bn)
Google is main competitor,
Does RUBI have a lot of
NO most ad tech companies are customers,
competitors?
small number of smaller competitors
CONFIDENTIAL | 18RUBI provides superior monetization for Sellers
across all inventory types
CPM
DIRECT
ORDERS $$$$ Agencies
Premium
REAL
SELLERS TIME $$ DSPs
BIDDING
Unsold
STATIC
BIDDING $ Ad Nets
Sources: PriceWaterhouseCoopers Entertainment and Media Outlook 2013-2017, IDC, Real-Time Bidding in the US and Worldwide 2010-2017, Advertiser Perceptions, Advertiser Intelligence Reports Wave 17
CONFIDENTIAL | 19Rubicon Project is the independent leader
Rubicon
Google
Project
Market Share of
Global RTB
For 3rd Party
Exchanges
Other Pubmatic
Appnexus OpenX
Sources: Internal Estimates
CONFIDENTIAL | 20Rubicon Project is a global leader
comScore 100 Nielsen top
Publishers 250 (France)
(United Kingdom)
53% 42%
comScore 100
Publishers
(United States)
40%
25%
Nielsen Top 100
(Australia)
Serving over 30 Markets
Los Angeles | San Francisco | Seattle | Chicago | New York
Note: US Market share includes all comScore 100 publishers – Intl market
London | Paris | Hamburg | Milan | Sydney | Tokyo | Singapore | Sao Paolo shares exclude publishers without advertising
CONFIDENTIAL | 21Significant customer, product & geographic
expansion in Q2 2014
Japan
Singapore
Geography
Brazil
Existing publisher base being leveraged into
mobile:
Mobile
App monetization functionality launched:
Customer
Product
Now powering exchange for InMobi – largest
independent mobile ad exchange:
CONFIDENTIAL | 22Dual network effects, technology and data create
significant competitive barriers
Dual Network Effects
MORE
DATA
Sticky
Seller
Integrations
MACHINE Proprietary
LEARNING
MORE
Pricing Real Time
MORE
Data
BETTER
PRICING
BUYERS
SELLERS Cloud
Machine
BETTER Learning
MATCHING
Algorithms
CONFIDENTIAL | 23Leveraged software business model
COMPELLING
ATTRIBUTES
FINANCIAL
HIGHLIGHTS
Rapid
Growth
50%
Revenue
CAGR
(full
year),
Leader
in
RTB
$600MM+
Managed
Revenue
(Q4
2013
Annualized),
Large-‐Scale
Transac3on
Marketplace
Growing
Volume
and
Price
Expanding
Spend
per
Buyer
and
Seller
High
Visibility
(High
Seller
Reten3on)
Leveraged
Opera3ng
Model
~
90%
of
opera3ng
expenses
are
fixed
CONFIDENTIAL | 24Revenue growth and operating leverage driving elite
performance
($
millions)
2012
2013
Q2
2013
Q2
2014
Managed
Revenue
$338.9
$485.1
$112.7
$153.5
Revenue
$57.1
$83.8
$19.0
$28.3
Opera3ng
Expense
$58.3
$87.7
$20.6
$35.4
Net
Income
($2.4)
($9.2)
($2.1)
($9.4)
Adjusted
EBITDA
$9.2
$11.2
$2.1
$2.7
CONFIDENTIAL | 25RUBI’s performance & position are compelling
Performance = elite 4% of public companies
Large & fast-growing advertising automation market; RUBI growing faster
Leading independent exchange, ad tech reliant on RUBI
Growth opportunities lead to $ billion+ revenue opportunity
Software model – sticky integrations, recurring and predictable revenue
Defensible technology & network effects
CONFIDENTIAL | 26appendix CONFIDENTIAL | 27
Appendix: GAAP to Non-GAAP Reconciliation
FY
2012
FY
2013
Q2
2013
Q2
2014
Financial
Measure:
($
thousands)
Net
loss
($2.4)
($9.2)
($2.1)
($9.4)
Add
back
(deduct):
Deprecia3on
and
amor3za3on
expense
6.9
8.4
2.0
2.7
Stock-‐based
compensa3on
expense
3.0
6.4
1.5
7.1
Acquisi3on
and
related
items
.5
.3
.1
-‐
Interest
(income)
expense,
net
.3
.3
.1
-‐
Change
in
fair
value
of
preferred
stock
warrant
liabili3es
.5
4.1
.4
1.7
Foreign
currency
(gain)
loss,
net
.2
.7
-‐
.4
Provision
for
income
taxes
.1
.3
.1
.1
Adjusted
EBITDA
$9.2
$11.2
$2.1
$2.7
CONFIDENTIAL | 28You can also read
