I’ve written before on the relative dearth of investment in publisher-side ad technology – at least compared to the VC windfall recently bestowed upon buy-side start ups – but my prior complaints are quickly becoming outdated. Look no further than yesterday’s news that ad server OpenX raised $20 million to support its continuing development of a platform geared for premium digital publishers. I recently got a chance to demo the new OpenX platform and found that they are doing some interesting and useful things around the integration of exchange-based selling and audience data into the core ad serving environment. Still, normally such news wouldn’t merit a (rare) blog post from me, but the particulars of this round of funding highlight a couple broader trends that are going to deeply affect the sell-side over the next two years.
· The publisher ad server wars are heating back up. DoubleClick’s DFP still dominates the enterprise ad serving market for publishers, but smaller vendors like OpenX are beginning to make inroads with up and coming publishers and in emerging advertising markets (especially in Asia). It’s going to take a lot to get a publisher to rip out the core of its business by replacing its ad server, but the pressures of managing new, complex products (e.g. audience targeting, exchange-based sales) across more channels (e.g. video, mobile, and tablets) will make this a consideration for many publishers. This trend has already hit the market as publishers have turned to specialized ad servers like Admeld and Rubicon Project (for exchange-based sales) and FreeWheel (for video).
· Big tech vendors are entering the online ad technology market. Perhaps the most interesting aspect of the OpenX announcement to me was the leader of the funding round: SAP Ventures, the venture arm of the German enterprise technology behemoth. Make no mistake – this isn’t the same as SAP buying an ad server – but it does demonstrate a clear interest in the ad technology space from an enterprise software giant. This is part of a broader trend toward established software vendors moving into the advertising tech space. Microsoft has certainly played in this space for years, but newer entrants like Adobe, IBM, and Oracle are bound to start making waves at the intersection of interactive marketing and IT.
There's more research on publisher-side ad technology to come. Follow me on Twitter @michaelgreene for updates.