Orange-France Telecom And OpenX Launch A New Ad Exchange In Europe

Orange Ad MarketOpenX announced a major expansion of its exchange strategy and infrastructure as it will partner with Orange-France Telecom Group to create the Orange Ad Market. According to a release, “The initial launch will take place in the second quarter of 2010 in the UK and France with planned launches following elsewhere in Orange’s European footprint.” Read more.

With localized access points of the Orange Ad Market, Orange and OpenX hope to harness the growing exchange business throughout Europe. Orange will leverage not only its publisher relationships, but its deep agency ties to drive business through the exchange as the conglomerate looks to ensure that the exchange model’s future is not controlled by any single entity – such as Google. Orange’s Pelillo told, “We are a clear and open alternative in a nascent market.”

For OpenX, they’re targeting Europe through a partner. The Orange Ad Market is the European extension of their worldwide exchange and the unlocking of European sites through its exchange will likely yield European ad dollars as well as U.S. ad dollars. U.S. agencies, for example, could buy European, or even U.S. audience on European websites available through the Orange Ad Market.

With Orange’s unique inventory, the Orange Ad Market could become an important source of inventory to demand-side platforms looking to scale beyond what’s typically been available through Google’s DoubleClick Ad Exchange, Yahoo!’s Right Media Exchange and a few others. Given legislative moves in the EU recently to prevent cookie tracking, it will be interesting to see how the demand-side platform opportunity evolves as cookies are mapped across inventory sources and around the globe.

Tim Cadogan, CEO of OpenX, and Vincent Pelillo, Director, Orange Advertising Network, Orange, discussed details of the new partnership. How does Orange Ad Market fit within OpenX’s overall exchange strategy?

Cadogan of OpenX: It fits perfectly with OpenX’s exchange strategy, which is clear and simple. It is to power a completely open, transparent and unified global exchange that drives significant economic value for publishers and ad buyers and provides an alternative choice for all participants. Bringing major regional partners – like Orange in the case of the Orange Ad Market partnership – into a global alliance based on the OpenX Market fits so well with the strategy because it brings the best of a truly global market together with a deeply multi-local approach, thereby driving participation, scale and choice.

What will prevent Google and Yahoo!’s Right Media from taking OpenX exchange business in Europe – and globally?

Cadogan: With Orange Ad Market, OpenX and Orange believe we are taking a totally new and competitively very differentiated approach to building the exchange space in Europe. It’s important to note that the exchange space in Europe is still very early and no one owns it. It needs real focus and careful attention in order to help it reach its full potential. Orange and OpenX are convinced that by combining the benefits of deep multi-local knowledge and experience, dedicated local Orange teams and long-established supply and demand relationships in Europe together with a unified global market and technology platform from OpenX we will be able to grow the exchange market very successfully. We think this approach is different, better, sustainable and provides a real choice in the market for publishers and buyers.

Why go with a partner such as Orange in Europe?

Cadogan: The most important dimension of a good partnership is strategic alignment on the purposes of the partnership. Orange and OpenX agree completely on the problems the display market faces (supply fragmentation, buyer inefficiency etc). We both see exchanges as extremely promising ways to solve these problems. We both saw the potential for a new, breakthrough approach by combining multi-local and global approaches in a unique way. Furthermore, we also agree that it is important for there to be a neutral choice in the space. At OpenX, we also found it very exciting that such a major technology and media company wanted to invest its resources and partner with us to lead the evolution of a nascent online advertising category. These fundamentals form the foundation for our partnership and why we are so excited about it.

On the operational side there are several extremely compelling reasons for OpenX to partner with Orange.

  1. On the supply side
    a. Orange has extensive owned and operated supply. They are one of the top 25 publishers in the world. They will be flowing a significant part of this supply into the Orange Ad Market, which provides obvious scale benefits and also helps other publishers follow suit.
    b. Orange has also been operating ad network/site representation businesses in Europe for several years, representing many leading third-party publishers – in fact Orange Ad Network is the largest in Europe. This gives them very deep experience and knowledge of publisher needs and approaches. In fact, much more so than any other exchange operators. This knowledge and these relationships will help us quickly bring in more supply.
  2. On the demand side, Orange has exceptionally deep and long-standing relationships with agencies and advertisers across Europe.
  3. On the people side, Orange has terrific people with many years experience working in the European ad markets building strong relationships and trust with publishers, agencies and advertisers. These are all critical factors that will give us leverage as we evangelize and build out the still nascent exchange space in Europe.
  4. Orange has a very strong brand that helps drive awareness and participation.

Altogether we couldn’t be more excited about the partnership we have created and we are looking forward to deploying Orange Ad Market in the next few weeks.

Why is Europe ready for the exchange model today?

Pelillo of Orange: At Orange we are always driven by addressing customer/client needs and through our close relationships with both advertisers and publishers we could see a clear need for the exchange model in Europe. In a nutshell, display is broken and full of opportunities for growth and improvement that will benefit the whole ecosystem. The scale and efficiency of ad exchanges offer solutions to many of the problems that European advertisers and publishers face in the display space. The opportunities for a team who can provide the right Ad Market approach are as rich in Europe as the US and elsewhere. We think that our new Orange Ad Market approach is going bring these opportunities to fruition, benefitting everyone.

Why is Orange creating the Orange Ad Market in partnership with OpenX?

Pelillo: We had been studying exchanges for a while, as a way of completing the offering of Orange Advertising Network. We believe in the benefits of a local offer – being close the customer and providing a simple, relevant solution with the best inventory. To deliver this we needed to partner with a leader in the global marketplace and we specifically wanted a partner who followed an open approach and shared our philosophy.

We decided to partner with OpenX to develop Orange Ad Market for a number of important reasons. First, as we began our discussions, we quickly realized that we share a common vision of how an online advertising exchange could and should best benefit both publishers and advertisers. Moreover, we found that we are strategically aligned with OpenX, have complementary capabilities and have the same approach to collaboration.

We also wanted to partner with OpenX given both its superior technology platform and capabilities as well as its unique approach to marketplace design. And the OpenX team that is developing the market is simply world class.

Last, the fact that OpenX has such a massive global footprint was obviously important for us as we began to consider how to best operate a global ad exchange.

How will the revenue model work for Orange?

Pelillo: Orange and OpenX share together in the transparent transaction fee we generate from ads. This fee – of 20% – is the same for all transactions. But it’s important to understand that it only applies to transactions that beat publishers’ minimum prices and make them more money. As a result, we make money when we help publishers make more money.

By John Ebbert

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