The gloves are off: The Guardian sues Rubicon Project for undisclosed fees

Tensions between ad tech vendors and publishers have been high for some time, since programmatic advertising became the dominant form of trading display advertising.

And The Guardian has been on the ad tech vendor warpath ever since it ran an investigation on its own inventory and found that it was only receiving 30 pence for every pound an advertiser spent with it programmatically.

The rest was being siphoned off by data merchants. The Guardian’s chief revenue officer Hamish Nicklin declared the result of the investigation at a MediaTel event in London last year. And ever since, the publisher has been working hard to come up with new terms for its relationships with ad tech vendors, as part of plans to reset the imbalance of power between ad tech vendors and publishers.

It’s not hard to see why: Roughly 80 percent of the publisher’s digital display inventory for the last three months, has been traded programmatically. And it has announced a new wave of cuts to both its U.S. and U.K. operations.

“Without buyer fees we would need to charge sellers more, and we think our approach is fair,” said Rubicon in a statement released to Digiday. “We charge buyer fees for certain services we provide and have disclosed that fact publicly, including in our SEC filings, and in client contracts, including a contract we signed with Guardian over a year ago. We split our fees between sellers and buyers, reflecting the value we provide to both.”

According to Business Insider, the Guardian is aiming to recuperate somewhere in the single-digit millions.

One senior publishing exec at another national newspaper, who spoke under condition of anonymity, said: “There are huge questions around trust and transparency in the digital advertising marketplace, and that’s a problem for everyone. The lack of fee disclosure is one very good example, so I fully support any action that seeks rectify the current marketplace opacity.”

Even those on the ad tech vendor side applaud the move. “It’s a big, smart but brutal move,” said an exec at an ad tech vendor, who is not a Rubicon competitor. “Tech and media should be separate, with different fees. There is no excuse for opaque black-box fees from SSPs. Clearly ad tech vendors need to make money, no one disputes that. It’s the ‘how’ they make money that’s the problem for publishers.”

“I suspect a bunch of demand side players are now carefully scrutinizing their SSP contracts,” added the same exec.

It’s yet another headache for Rubicon. The company’s share price dropped 70 percent over the last year, and conceded it had been slow to jump on the header bidding train.