Payam Shodjai (Google): SSP margins are coming down, way down, because the technology, demand and supply that SSPs offer have been commoditized. Rubicon's take home will be around 10% to 12% next quarter. I think SSP margins will stabilize at around 5%. This creates an obvious dilemma for us. AdX is the lifeblood of our programmatic business. Without AdX margins, our programmatic business doesn't seem like a worthwhile endeavor.

What if we did something courageous? We drop the AdX/Demand Product margin to a transparent 5% for undifferentiated demand. AdX Buyer revenue is $1.8B growing at 2% yoy — net revenue would go from $360M to $90M, a total loss of $270M. However, demand/performance would likely increase significantly. The message to the market: AdX is now charging 5% for basic demand — what is your SSP charging you?

Jim Giles (Google): The other important thing versus most SSPs is that we also have the ad server. Pure SSP is definitely commoditizing — ultimately, I think only SSPs that also have an ad server will survive. The combination of ad server / exchange plus data gives us cover for total costs that are higher than other exchanges.

Eisar Lipkovitz (Google): While true that 20% for just sell-side platform/exchange isn't likely justified by value, I equally don't think Rubicon can run an actual business with 5% or even 10%. Until I see DBM actually charging for Google secret sauce anything but platform fee, I'd object to any changes on the sell-side.