As you all know, media dollars bought and sold on ad exchanges is growing fast. [Cite stats on slide]And dollars spent on real-time bidding on those exchanges is growing even faster.
Though the industry is growing fast, it still faces some challenges
At OpenX, as we looked at this opportunity, we realized that a successful marketplace for advertising starts with one thing: Great inventory from great publishers. But we saw publishers struggling with a patchwork of vendors to generate revenue. Ad servers, ad networks, optimization services, data providers…We asked ourselves, what if we could redesign adserving from the ground up? What if we could create one platform, that publishers could use to manage all their ad revenue…what they sell directly through their sales force, and what they sell indirectly. And wouldn’t it make more sense to call it “Revenue Serving” rather than ad serving?So OpenX spent two years and millions of dollars building our next generation ad server calledOpenX Enterprise. It was released earlier this year and making a major impact.
Major publishers like Groupon, Excite Japan, and others have already adopted OpenX Enterprise. They chose it because they needed a more modern ad server that they could adapt to their needs, was easier to manage, and put them back in control of their data.
We also saw a need for an ad exchange connected to our ad server. But it soon attracted other publishers that didn’t use our ad server. By working closely with publishers, we learned about what they needed. We call our ad exchangeOpenX Market.Now around 30 Billion impressions per month flow through OpenX Market. It is a real time auction that allows advertisers to bid in real time for publisher inventory based on the value of the individual impression to the buyer. Using a system of floor pricing and filters publishers are able to access a new indirect sales channel to ensure their non-guaranteed inventory is being sold at the highest price possible. This integration allows publishers to manage directly sold and third party advertising channels in one single system which is a huge step forward for the industry and will results in more intelligent optimization and ultimately higher yields.
It’s attracted premium, top tier publishers, like Eharmony, Apartments.com…
…Huffington Post, Hollywood reporter…
…and Bleacher report
And all that great inventory has attracted over 75 active buyers representing thousands of brands.DSPs like AppNexus, Turn, and X +1; trading desks like AdNetik and Vivaki; AdNetworks like Media6Degrees and Audience Science; and even major brands like Best Buy, Linked In, and Target.
With this quality inventory, and these buyers (with serious budgets,) OpenX Market has grown explosively. In fact, we now have:450 M global unique users180 M US unique users30 B Monthly Imps And are growing at a rate of over 200% a year!We’ve achieved scale, which drives liquidity. This increases yield for publishers, and provides a broad audience for advertisers to target very specific audiences.
Here’s how it works…it starts with the publisher…
Who sends an ad impression to OpenX Market as the page is loading. They specify a minimum price they’re willing to accept, plus any other restrictions on who can buy it, acceptable ad creatives, etc.
OpenX Market then solicits bids from top buyers like AppNexus, X+1, and Turn in a real-time auction, in this case
After they bid, OpenX selects the winning bidder. And sends that creative back to the publisher’s website.
Turn wins the bid at $1.50 CPM. But since OpenX uses a 2nd price auction model, the winning bidder actually pays the second highest bid…or in this case $1.25. This incents bidders to bid as aggressively as possible, and has been shown to maximize yield for publishers.This entire process takes just milliseconds, so there is no latency visible to users.
We’ve learned that the key to making an exchange successful is to put the right controls in place. Both for the publishers and the buyers.On OpenX Market, publishers decide what inventory to sell, as well as the minimum prices they’ll accept.They decide who can buy (with whitelists/blacklists) and can even set up Private Trading, where only a select group of advertisers can access the inventory. And they decide what ads can run (for example, the creative type & brand level controls)This puts publishers back in control, and enables them to develop smart strategies to monetize all their inventory….for example, they could make the 300 x 250 ads on their home page available to only top tier agencies at premium rates…but make inventory deeper on their site available to a wider set of buyers at more aggressive rates.
We equip buyers with controls as well. For example, they can use very granular targeting to reach their audience, including:RetargetingCategoryDomainFrequencyGeoUser agent settingsPlus, they can overlay 3rd party data onto inventory they buy on OpenX Market to create unique an proprietary audience segmentsThey can choose only inventory that has been manually inspected and determined as “Brand Safe”, which includes hundreds of millions of sitesAnd most importantly, buyers get full transparency. Domain level reporting enables them to see where their ads are running, and optimize campaigns by picking the sites that perform the best.
Increasing Brand Awareness and Site TrafficRecrue wanted the campaign to improve brand awareness, brand recognition, and increase Bazi’s website traffic. So they focused on three key demographics: active working females, college students, and people who participate in outdoor sports activities. To find these distinct audiences, Recrue turned to OpenX Market. OpenX then developed the specific plan, including pricing, distribution, frequency caps, and pacing. OpenX Market delivered the target audience inexpensively by combining specific demographic groups with sports enthusiast inventory from niche sites like MapMyFitness.com, Surfline, and Women’s Health Base.The results were exceptional… [cite stats on screen]It shows the power of using real-time bidding on an exchange, combined with smart retargeting and audience segments to drive sales and build brand.
Ad Exchange 2.0:Quality, Control, & Efficiency QasimSaifee, GM Media Services
A Trend You Can’t Ignore Exchange traded media takes off: 2010: $730 Million 2011 (est): $1.4 Billion Real-time bidding grows fast: 2010: $350 2011 (est): $823 Source: Forrester Consulting Feb 2011 1
Still Some Challenges Ad and site quality concerns Not all exchanges are RTB enabled Inadequate controls & transparency Complexity 2
What If We Rebuilt Ad Serving? 2 years in the making, millions in development
Major Publishers Adopt the Platform Why all the excitement?
A Unique Relationship With Publishers Publishers put inventory into OpenX Market directly via their ad server
Top Quality Sites on OpenX Market 6 Sample publishers:
Top Quality Sites on OpenX Market 7 Sample publishers:
Top Quality Sites on OpenX Market 8 Sample publishers:
Buyers on OpenX Market DSPs Trading Desks Ad Networks Major Brands
Explosive Growth on OpenX Market 450 M global unique users 180 M US unique users 30 B Monthly Imps 10 Growing at over 200% a year!