This brings Rubicon’s total venture funding to $45MM, a sizable amount of capital raised amidst the global economic downturn. This latest round of funding will likely be used for additional acquisitions by the Rubicon Project to enhance targeting, relevancy and distribution for ad networks & publishers.

Just last week, the Rubicon Project acquired behavioral-targeting firm Others Online. The Others Online acquisition enables the Rubicon Project to add a layer of behavioral targeting between publishers and ad networks, placing Rubicon at the cutting edge of a shift from contextual targeting to one based on actual user behavior. This makes the Rubicon Project a serious player in terms of both the targeting AND distribution.

And it is that combination, along with Rubicon’s effective model of solving pain for both publishers & networks, that likely led Google to enter this market last month. We predicted at the time that this is actually a very good thing for the Rubicon Project.Tweet

McKinsey has been studying the Enterprise & Web 2.0 topic for nearly three years now and has released some great studies and interactive charts on the subject along the way. And its an important study too. Forrester Research predicts that “Enterprise 2.0″ will become a $4.6B market by 2013 (more commentary here). We’ve also recently reported on the opportunity that awaits Web 2.0 entrepreneurs who focus their talents on competing in the enterprise space.

And while there have been some valid objections to this study, the study has two clear insights for entrepreneurs & investors:

1. Top executives view Web 2.0 tools in a positive light, even if the evidence is anecdotal
2. There is a desire to further incorporate these technologies, and there’s a clearly-expressed pain point in doing so

This is good news for both agencies and entrepreneurs.

For agencies, this means that any corporate pitch with a Web 2.0 “hook” will likely arouse interest within the c-level suite (you know, the guys who sign the big checks). However, agencies should be mindful of how their phrase their value proposition. Top executives are talking about Web 2.0 in terms of how it increases their productivity, not how it helps with branding or decreases their customer-acquisition costs. Any pitch outside this boundary may earn you an introduction to the CMO or SVP of Marketing, but your pitch will either die on the vine or be met with lots of competition & price pressure (where seven-figure programs will become six-figure campaigns). Agencies with a Fortune 500 clientele and a strong understanding of business process, technology, and social media / web 2.0 could stand to gain here.

For entrepreneurs, this means there is an opportunity to direct your products & services toward the needs of big corporate customers, as long as the value proposition is expressed in a way that helps them gain more productivity from their current resources (i.e. squeezing more juice out of the lemons they have). This could mean creating products that encourage workplace collaboration, eliminate duplicate efforts, or harness the power of informal networks. There’s been a lot of talk this year about Facebook for the Enterprise. Start your research there to get a sense of where this big wave might be heading (see articles below). You may also want to staff some Fortune-500 experience in your product & biz-dev ranks.

And there is one low-hanging fruit that the survey exposed — the ‘adoption hurdle’. Survey respondents found that incorporating Web 2.0 technologies is a little tricky, and traditional financial or performance incentives aren’t working to motivate continued use. What is working, however, are informal incentives of the Web 2.0 culture such as ratings by peers, recognition or “likes” on meaningful contributions. One terrific example comes from Santa-Monica based Rubicon Project, where individual Yammer contributions are openly displayed on plasma screens throughout the office. Let’s see if Google copies that too.

More articles on this topic:
(Ars Technica) McKinsey: businesses reaping benefits from Web 2.0
(TrendSlate) Web 2.0 Entrepreneurs Can Use Design to Make Big Money Elsewhere
(ZDNet) Why social networking tools will go enterprise: All your employees are using them
(NewsGator) Facebook for the Enterprise Explained
(E&P) Facebook for the Enterprise: the oil and gas industry goes social
(msuster) Businesses Must Manage the Twitter ConversationTweet

This development is significant for a couple of reasons:
- Google will “approve” the incremental ad networks that can leverage AdSense distribution
- There are existing companies such as the Rubicon Project and OpenX that offer ad network optimization via one source

Key Questions
- What does this mean for the ad network consolidators and optimizers?
- Is this a ploy by Google to instill fear and then acquire one of them?

With Yahoo finally giving in and agreeing to the Bing-powered search, is Google having second thoughts about its current model? Google seems to be everywhere, so at the same time, maybe they are realizing this is an opportunity to increase their ad-distribution power over ads that they don’t sell directly, rather by other ad networks.

Google sent the following message to AdSense participants announcing the plans:

We’re writing to let you know about an upcoming update in your AdSense account designed to help you generate the maximum revenue from your ad units. You’ll soon be able to allow multiple ad networks to show on your pages, which means that advertisers from external Google-certified networks will be able to compete with AdWords advertisers for your ad space.

If you’re unfamiliar with what ad networks are, they’re companies that partner with advertisers and publishers to buy and sell ads on sites they don’t own themselves, similar to AdSense. Ads from these networks will compete with Google ads to show on publisher sites, and the ad generating the highest revenue for publishers will be displayed.

To ensure the quality of the ads appearing on your sites, we’re certifying all participating ad networks for adherence to our standards for user privacy, ad quality, and speed. You’ll also have control over which networks can show ads on your pages — you can choose to opt out of receiving ads from specific networks, or all networks completely. This means you can continue to show ads from only AdWords advertisers if you’d like.

Finally, some ad networks use tools similar to Google’s interest-based advertising to show more relevant ads to users on the sites they visit. These ad networks won’t be permitted to collect data from your site for the purpose of subsequent interest-based advertising, but we’ll allow those who comply with user privacy guidelines to show ads using these tools. You’ll have the ability to opt out of showing ads based on user interests from these ad networks, and we’ve changed our requirements for third-party ad serving to reflect this. More information is available at http://adwords.google.com/support/bin/answer.py?answer=94230 .

These new capabilities will automatically be enabled for your account, and you’ll see a new section in your Ad Review Center where you can allow or block specific ad networks. Please note that we’ll gradually be adding new ad networks to AdSense accounts over the next few months, so you won’t see any immediate impact on your ads or your earnings.

To learn more about this launch and managing the ad networks appearing on your pages, visit the AdSense Help Center and watch our video demo at http://www.youtube.com/watch?v=4HyJPOVLd3I .

Sincerely,

The Google AdSense Team

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