Open For Mobile Business

This article originally appeared in the March edition of our quarterly magazine. To get the full experience, you can read the issue online here, or subscribe to receive a physical copy here.

martin price openxThe history of OpenX dates back to 2008, when it started out as an ad serving company; it was a UK startup that migrated to Southern California with considerable success. So much so, in fact, that today it is recognised as one of the leading programmatic exchanges both Stateside and in the UK. And mobile is an increasingly important part of its global platform.

While the ad serving business is still an integral part of the OpenX platform, it is its real-time ad exchange and SSP (Supply Side Platform) that are now its core offerings. The company works with more than 1,000 publishers and advertisers around the world serving billions of ad impressions a month. Of note, the number of monthly impressions served is second only to Google. OpenX Mobile, which includes mobile web publishers, app developers and buyers, is the fastest growth area for the company.

Innovation and efficiency

OpenX’s partners have been attracted by an approach built on innovation and efficiency. “There’s a lot of hype right now around programmatic, and a lot of excitement about the supposed efficiencies that it brings to the business of digital advertising, compared to the old way of doing things,” says OpenX VP product, Martin Price. “However, some of the process that drive programmatic are themselves pretty inefficient,”

One of these is the way that the auction process is typically conducted, as Price explains. “The problem with the auction process is that it is somewhat siloed between the real-time bidding and network worlds,” he says. “In the ‘waterfall’ model, if the highest bid for an impression comes from an ad network, but then the network refuses the impression, it is passed down to the next highest bid in the ad network stack. In the worst-case scenario, if each subsequent ad network refuses the impression, the price keeps dropping and dropping and the publisher makes less money. This happens even if there was an advertiser willing to pay more for that impression in a real-time auction, because the waterfall model cannot accommodate the real-time and the ad network stacks in a unified way.

“One of the benefits of OpenX is the level of transparency our mobile ad exchange offers buyers. In a mobile-first world where cookies are less prevalent, the amount of data passed between an exchange and to buyers makes a big difference to the buying-decision process. “We focus on providing greater transparency in terms of mobile data signals to enable our publishers to optimise their performance more effectively.”

Demand Fusion

OpenX solves the problem of fractured demand with its ground-breaking Demand Fusion technology, which fuses real-time bidding and ad network demand into a single, unified auction. So in the previous scenario, if the highest bid comes from an ad network, which then refuses the impression, and the next highest bid comes from the real-time auction, the real-time bid will win the impression. The effect of this for the publisher is to drive up the price and maximise the yield by increasing competition for the impression, while at the same time opening up access to more impressions for advertisers. OpenX’s SSP solution launched in June last year with YP, and The New York Observer on board as early customers.

Having successfully launched Demand Fusion for web and mobile web inventory, OpenX’s next move is to bring it to the world of in-app advertising which it hopes to do by the end of the second quarter. To that end, OpenX is launching a limited beta with selected app publishers, offering a more sophisticated, data-driven way to optimise yield for their in-app inventory.

“The app ecosystem has fundamentally different characteristics and challenges, including differences in integration types such as SDKs and APIs, multiple ad formats, such as native and interstitials, and diverse data signals required by buyers. As a result, we reimagined the best way to monetise inventory for our in-app SSP product from the ground up.” says Price.

OpenX’s new in-app SSP solution leverages its proprietary Demand Fusion technology to enable an optimised experience for publishers and advertisers alike. For the first time, publishers can optimise their performance with minimal manual configuration, while advertisers get access to the maximum number of impressions available in real time.

User experience

In addition to efficiency and transparency, OpenX is also committed to improving the user experience. “We believe in enabling advertising formats that fit better with the user experience and that can be bought and sold programmatically,” says Price. “A low-resolution 320 x 50 banner is not going to deliver the greatest experience on a 1080p high-definition mobile device, so we are committed to introducing more ad units that are more engaging and innovative, and also non-intrusive.”

An example of this is the OpenX Native Ad Exchange that the company launched at last year’s Mobile World Congress. This first global, Real-Time Bidding (RTB) exchange specifically for mobile-first native ads increases access to native, programmatic in-app inventory for advertisers, while giving publishers greater control over the type of ads they can offer, making it easier for them to deploy native ads at scale. The native exchange includes a native video ad unit that developers can run in feed, but with the sound turned off, leaving it to the consumer to decide whether to ignore or engage with the ad, without intruding on what they were doing.

Also during 2014, OpenX re-engineered its SDK to facilitate a number of additional ad units on mobile, including pre, mid and post-roll video, interstitial video, and the native in-feed video ads, delivered through OpenX’s own video player, but also with extensive support for publishers’ own custom video players. “In the future,” notes Price, “OpenX wants to bring the same sort of creativity and innovation in ad units to new devices and form factors, including connected TVs, wearables, and the myriad other appliances that will make up the Internet of Things.

“It’s only by listening to the needs of our advertiser and publisher communities that we can develop our platform in a way that will help publishers monetise and advertisers reach consumers with more relevant messaging. Programmatic has the potential to revolutionise digital advertising; we see our role as ensuring that it fulfils that potential.”