Ad tech company OpenX is announcing a new version of its supply-side platform today, which co-founder and Chief Revenue Officer Jason Fairchild described as “SSP generation two.”
OpenX offers a number of ad tools for online publishers, including an ad server, an ad exchange and, following the acquisition of LiftDNA in 2012, an SSP (which helps publishers automate the sale of their ad inventory).
Until now, Fairchild said SSPs (including OpenX/LiftDNA) were really built to manage multiple ad networks, and their support for the growing category of real-time bidding was “bolted on.”
When determining which ad to serve, SSPs will usually compare the ad network with the highest CPM (price paid per thousand impressions) to the highest bid from RTB. The approach seems to make sense, but the problem, as explained to me by Pranay Gupta, OpenX’s director of sales engineering, is that ad networks can say no to a publisher. At that point, however, the SSP is committed to the ad network route, so they’re forced to “daisy chain” through ever-cheaper ad networks until they find a taker — which means that they might make significantly less money than if they’d gone with the bid from RTB. (You can read more about the issues in this OpenX blog post.)
“Daisy chaining is the bane of any ad operations person,” Gupta said.
With its new “Demand Fusion” technology, on the other hand, OpenX ad network can continue comparing ad networks and RTB bids throughout the process. For example, if the most lucrative ad comes from an ad network, with RTB coming in second, then the SSP can go with the ad network first. If the network says no, publishers can still get the ad from RTB, which wouldn’t have been possible before.
Basically, what Fairchild and Gupta seem to be describing is the logical way to manage these bids. However, they said OpenX had to work on this problem for two years and overcome a number of major technical hurdles. (One of the keys to their approach is executing all of the bidding within the user’s web browser.)
OpenX customers using the new SSP system include YP, TVGuide.com and The New York Observer.
Fairchild also argued that this technology is key to OpenX’s “next frontier,” helping publishers take advantage of programmatic technology in a manner similar to advertisers. To make that happen, the company needs to break down “the separate silos of demand … so that they can talk to each other.”
OpenX recently hired longtime Hulu CFO Tom Fuelling in what may have been preparation for an IPO.