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Telefónica Launches Axonix Ad Exchange Using Velti’s Mobclix Tech

Kirsty Styles

[caption id="attachment_43159" align="alignleft" width="300"]SimonBirkenhead and Axonix logo Axonix CEO Simon Birkenhead, formerly of Telefónica Digital[/caption]

Telefónica has partnered with Blackstone’s GSO Capital to launch a mobile ad exchange running Mobclix tech acquired from Velti.

Velti agreed to sell off various parts of its global business to liquidator Blackstone after running into significant financial difficulty last year. Programmatic exchange Mobclix, bought by Velti in 2010, was the only part of the business to cease operations but the company’s ad infrastructure has now been revived in this deal.

The Axonix platform, which will incorprate Telefónica customer data, is being switched on in mid-May with more than 100 demand-side partners inherited from Mobclix, plus tens of thousands of publishers, with a specific focus on US, Europe and Latin American markets. Telefónica data won’t be integrated into the platform straight away but this process will happen country-by-country starting with Germany and Brazil in late summer.

Axonix is being headed up by Simon Birkenhead, who leaves his role as Telefónica’s director of global advertising sales. “Programmatic is something that we were looking at as a long-term strategy for the advertising business that we’ve been scaling globally at Telefónica Digital over last two years,” Birkenhead told Mobile Marketing. The potential for a deal arose around six months ago and was eventually struck six to eight weeks ago with his role as CEO confirmed in the last month.

“There’s very little data available for advertisers to use for targeting purposes on mobile but operators sit on a very rich database of demographic data, real-time location data and other behavioural indicators of people’s interest," Birkenhead said. "This is a very strong global business even without Telefónica data embedded into it but advertisers will now be able to buy advertising impressions that have an extra layer of targeting so ads are more effective. Publishers will be regarded as more effective by advertisers so they will be able to command higher rates – more money for the same ad impressions – which will significantly increase the price that each ad impression sells for."

Birkenhead said Axonix, which echoes efforts already being made by Sprint in the US and Singapore's Singtel, will complement, not compete with UK operator JV, Weve. "We’ll partner with Weve to give additional ad inventory that they can enrich with their data and provide to their customers. It's another channel from which they can buy.

"The vision is that we become a trusted partner to other operators around the world who would like to implement a strategy that Telefónica has been leading – using data to enrich mobile advertising." He points particularly to operators who are already partners of Telefónica – including France Telecom, Telecom Italia, China Unicom.

He said the ability for Telefónica customers to opt in or out of the Axonix exchange will depend on the country. “We have an in-built incentive to make sure we don’t upset our customers. All of the data we may inject into the advertising system through Axonix will have personally indentifiable information stripped out so there's no way identifying individual users. But there is a growing awareness among consumers that to get a better experience there has to be some exchange of data.”

Although the partners are distancing themselves from the now-defunct Velti company, former Mobclix VP of global demand Simon Bailey will join Axonix as VP of sales. Birkenhead said they are keen to bring it more supply but acknowledged the hangover from Velti. "On the publisher side – there is an issue around the bankruptcy of Mobclix – there are suppliers that still have debts with the old Mobclix business.

"Our message is that we have the backing of Telefónica and Blackstone which means we have a much stronger financial footing than Mobclix did. We're not reliant on VCs or third-party sources of finance. We’re confident we are a sustainable business that will be able to honour our commitments."

Birkenhead had been working at Telefónica Digital as director of global advertising sales for the past two years but this part of the business has now been brought into the wider group. “We needed to incubate new businesses in a separate structure, both to give these new businesses a bit of breathing space but also so as not to disrupt the core operator businesses. But at the end of last year the time had come for these new digital businesses to be integrated into the core business."

Axonix, with Blackstone and Telefónica as shareholders, will be headquartered in London and run independently .