Home OpenX Feeling Bullish – Ad Server Company Announces Strong Growth

OpenX Feeling Bullish – Ad Server Company Announces Strong Growth

OpenX, an open source ad server for web publishers, released statistics today to show its strong recent growth – especially in the last 6 months. We interviewed the CEO of OpenX, Tim Cadogan, about the data. We also wanted to know how OpenX compares with Google’s competitor Ad Manager, and we discovered how exactly OpenX will make money.

According to OpenX, as of December 2008 more than 300 billion ad impressions now run through its software every month. Its core product is still the open source OpenX Ad Server – version 2.6 was launched August 2008 and included a new API. This product has had more than 10,000 active downloads and is getting a 25 billion monthly ad impression run rate.

In October 2008 the company launched OpenX Hosted, which is a hosted ad platform for publishers (disclosure: ReadWriteWeb uses it). It’s since had 2,500 publisher sign-ups and is currently receiving a 1 billion monthly ad impression run rate. Finally, OpenX noted that the OpenX community has increased 25% over the past year to more than 35,000 total publishers – who use OpenX to serve ads across more than 150,000 websites.

Elephant in The Room

These are impressive statistics, but there is a rather large elephant in the room which today’s press release doesn’t mention. That of course is Google Ad Manager, which directly competes with OpenX. In a phone call, we asked the CEO of OpenX, Tim Cadogan, if the company had any comparative data showing how OpenX was faring against its much bigger competitor. Cadogan told us that Google and other ad serving companies haven’t shared their data. However he did explain how OpenX differentiated itself from Google Ad Manager. There are 3 main differences, he said:

1) OpenX is an independent, neutral provider – a point which Bernard Lunn expanded on here in a March 08 post entitled Manifesto to Avoid a Google Media Monoculture.

Tim Cadogan claimed in the call that OpenX complements what Google does – by which he meant that it can arbitrate between ad networks, including Adsense. Although Tim Cadogan didn’t say it directly, the inference is that Google’s Ad Manager can’t do this arbitration as fairly.

In his March post Bernard made clear what the dangers of using Ad Manager are: “It is the integration [of Ad Manager] with Adsense that is a worry. […] Take the link to Publisher tools and you get to an Adsense page with all the tools available for Publishers. Yes, all these free tools are designed to sell more AdSense. Letting Ad Manager and other Google tools automatically make these decisions on behalf of AdSense while you fly blind is not smart”.

2) The second difference between OpenX and Ad Manager, according to Tim Cadogan, is that OpenX is open source and “infinitiely customizable”.

Examples of companies using OpenX Ad Server are FM Publishing (another disclosure: they are our ad network), AOL’s Userplane (for Enterprise), Dragon Media Online (Enterprise), and AneXusIT (Video).

3) The third difference is that OpenX is “very very feature rich” compared to other ad servers – and not just Google’s, noted Cadogan.

These are all good points, although of course none of it may be relevant if Google gains dominance in the ad server market. However there’s no indication that is happening and OpenX may well be carving itself a great niche as the ‘Red Hat of ad servers’.

Revenue Streams

The other open question for OpenX is how will it make money? OpenX has recently developed four new revenue streams:

1) Professional services to its publishers (started in October 2008).

2) Three premium support packages, primarily targeted at large and medium publishers.

3) Premium Hosted packages for Enterprise level publishers, including additional ad impressions, support resources, service level agreements and customized solutions.

4) OpenX Market, a pilot program described as “a new monetization platform designed to connect the company’s vast publisher community and their rich inventory to a wide array of advertisers”.

The fourth point touches on something that we wrote about back in March. Sean Ammirati speculated that OpenX may “ultimately become an ad network” or an ad exchange. The OpenX Market seems very similar to the ad exchange idea.

So we asked Tim Cadogan if an ad network is on the cards too? Cadogan replied that OpenX won’t become an ad network, but that the OpenX Market aims to help publishers source better yielding ads – so it’s a ‘yes’ on ad exchange (but he said they’re approaching it in a different way with OpenX Market), but ‘no’ on the ad network.

We’re interested to hear from readers about whether they use OpenX or Ad Manager – or a different product – and what your experiences have been.


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