xAd Integrates With Rubicon To Expand Location-based Private Marketplaces

The agreement marks the first outside use of xAd’s bid requests and promises to open up more valuable mobile ad inventory at scale.

xAd's Dan Hight
xAd’s Dan Hight

The Rubicon Project is incorporating xAd’s location marketplace into the programmatic platform’s mobile ad exchange in a deal that could unlock large amounts of prime ad placements across apps and smartphone-based websites.

The arrangement can be viewed as just another in a flurry of location marketing ad partnerships that have been struck in the past few weeks, including the one between cross-device ad targeter Tapad and in-store analytics provider Placed a few days ago. But the Rubicon/xAd deal touches on a number of new elements beyond the sharing of geo-data and in-store traffic attribution models.

In essence, this partnership is about mutually reinforcing the growth of programmatic and mobile-based location advertising. And for xAd, which unveiled an improved tool for drawing more exact geofences around specific businesses called Blueprints last week, the nod from Rubicon is a form of added validation.

What’s most significant about this combination of technologies and platform users is that xAd is adding location data directly into exchange-based ad requests for the first time.

As Dan Hight, xAd’s head of Platform, told GeoMarketing, this will allow advertisers, as well as the demand-side platforms and agency trading desks who serve them, to understand the business locations at or near the point of a bid request. Through xAd, Rubicon’s hundreds of programmatic buying platforms, which cover tens of thousands of advertisers, can reach 300 million unique mobile consumers across more than 12 million verified business locations in the U.S.

“Our partnership with Rubicon is another step in driving value from location as a new category of buying,” Hight said. “In today’s mobile world, the context of location has very little meaning in a publishers’ floor pricing.”

“Our ability to provide the context of location to buyers in the bid request and allow buyers to create their own targeting packages will enable publishers to begin to capitalize on the location context value,” Hight added.

When the Rubicon deal is put into practice, xAd adds data to the bid request that says it is in proximity of a casual restaurant. As the data kicks in further, xAd can identify that the restaurant is (for example) a Denny’s and also that it’s near a big-box retailer, which xAd knows is a Target location. This allows programmatic buyers to create audience segments based on business locations on the fly as well as establish private marketplaces to geo-target general categories or specific businesses.

xAd recently unveiled Blueprints, which focuses on physical boundaries, not vague circles drawn around a location.
xAd recently unveiled Blueprints, which focuses on physical boundaries, not vague circles drawn around a location.

Mutual Benefits For Supply And Demand

The way publishers will be able to make that work is through partnering with Rubicon on creating private marketplaces.

The advent of private marketplaces started with “supply-side platforms” operated by Rubicon, PubMatic (which began collaborating with xAd on location-based private marketplaces in October), and AdMeld, which was acquired by Google in 2011 and was subsequently folded into its Doubleclick AdX.

These entities served the “supply-side” — i.e., publishers — who felt that the agencies on the buy side had all the advantages and tools in exchange-based environments, which employed an auction process. Publishers who put their ad space up for bid felt vulnerable to buyers who would simply drive the price down.

A private marketplace puts more control in publishers’ hands, as they can more easily select what kinds of buyers can view and bid on their inventory. The idea of a private marketplace that is tied to location-based advertising further narrows the field for publishers, who, in theory at least, will have better reasons to offer higher quality ad placements that have a geomarketing aspect to them.

The idea of private marketplaces has grown in appeal to agencies and exchange operators in recent years. Higher quality inventory from publishers means that marketers will continue to increase their ad spending on biddable exchanges — assuming companies like Rubicon and xAd can prove the value of the available placements in terms of both the position of the ads and the accuracy of the locations being targeted.

“There is tremendous traction in the market for advertisers thinking not just about local, but about location,” Hight said. “Much like search started with head terms and grew to longer keyword strings, we are seeing a similar expansion in mobile, where targeting relies on broader geofences, and has become more granular and sophisticated, making audience segments based on real-world activity.”

Rubicon's Joe Prusz
Rubicon’s Joe Prusz

Mobile Sellers’ Market

While Rubicon is considered a marketplace operator for media buyers and publishers, the Los Angeles company got its start as a yield optimizer for publishers (i.e., it helped sellers find the best online ad prices for their online ad space). While Rubicon has maintained its direct publisher relationships for its desktop programmatic services, mobile requires a different approach, said Joe Prusz, Rubicon’s head of mobile.

As an example, last May, Rubicon teamed up with mobile ad network InMobi on accessing that company’s publisher inventory. On the desktop, Rubicon maintains its relationship with a finite list of major publishers, such as CNN’s PC-based site. But the amount and variety of mobile publishing is wholly different.

“Our deal with InMobi included 30,000 app developers/publishers, Prusz said. “It doesn’t make much sense for us to individually approach all those 30,000 developers to onboard them to our platform. The best thing we can do is take our core infrastructure, provide that to major players [in the location ad space] and then, we can bring that programmatic demand into their environments.”