Rubicon Project and The Guardian Resolve Legal Dispute Over ‘Hidden’ Fees

Last year, The Guardian filed suit against the publicly listed ad-tech company, alleging that Rubicon did not fairly disclose how it made revenues from selling its inventory via its online ad exchange.

The dispute centers on the fees Rubicon Project charged media buyers for accessing inventory on its exchange—a practice it has since dropped—with the ad-tech outfit responding accordingly by filing a countersuit.

In its claim, Rubicon Project said it did disclose its buy-side transaction fees, further adding that The Guardian had caused the ad-tech company damage by letting rival third parties also sell ad inventory on the news title’s behalf.

However, a statement that Rubicon Project filed with the U.S. Securities and Exchange Commission reads, “Though the terms of the settlement agreement are confidential, the settlement is immaterial to the Company from a financial standpoint. In addition, because the settlement is a purely commercial one, it does not assign any liability to either party—whether the Company in respect to the Guardian’s claims, or the Guardian in respect to the Company’s counterclaims.”

The case helped prompt widespread debate over the oftentimes murky world of complicated fee structure involved in programmatic advertising, with the cessation of such buy-side fees significantly impacting Rubicon Project’s revenue stream.

In an earlier blog post explaining the rational behind this move, Rubicon Project CEO Michael Barrett, said, “Recent internal testing convinced us that removing buyer fees doesn’t just help buyers meet their performance objectives, but it encourages them to bid more actively and competitively, resulting in higher revenues for sellers.”

He added that charging buyer fees “made sense for us at one time,” but that changes in industry dynamics—namely requests for increased transparency, plus the rise of a new ad auctioning mechanic called header bidding—meant it had to change to retain competitiveness.

The emergence of header bidding means that many publishers offer the same ad impression through a number of different ad exchanges, which subsequently causes the buy-side of the industry to equally look into programmatic fees.

Speaking recently with Adweek, Chris Kane, CEO of media consultancy Jounce Media, said media buyers are now starting to ask suppliers for guarantees as they rationalize the number of supply-side platforms (SSP) or ad exchanges they work with.

“The complexity in the supply-path that [header bidding] creates means marketers now need to get organized around supply strategy,” he said. “This is where a marketer says, ‘I really got to get organized around my supply strategy because I basically have an adversarial relationship with ad exchanges.’”