Podcast: The Durability Of Ad Exchanges

AdExchanger Talks is a podcast focused on data-driven marketing. Subscribe here. This episode of AdExchanger Talks is supported by Tealium.

It was a long journey from OpenX CEO Tim Cadogan’s bucolic upbringing in Dorset, England, to the technology centers of California, where frenetic change is the only rule.

Cadogan has had a front-row seat to several waves of ad technology, having joined search ad startup GoTo (later Overture) prior to its sale to Yahoo and later worked in programmatic at Yahoo after the company acquired exchange platform Right Media. Neither search nor programmatic panned out for Yahoo, and Cadogan eventually left to found his own company.

OpenX started as an ad server but later added the exchange capabilities it is known for today.

“You were beginning to be able to transact in real time,” Cadogan says on the latest episode of “AdExchanger Talks.”  “And you were beginning to be able to use consumer data at the atomic level, the level of the impression, to access that data in real time and potentially trade on it.”

Cadogan’s idea was to build a marketplace using the 30,000 publishers that were using the OpenX open-source server to gain access to supply. It didn’t work out terribly well, since much of the open-source supply was poor quality.

“We ended up doing it the hard way,” Cadogan says.

Over the years, OpenX and its competitors have faced a series existential challenges – nonhuman traffic, Google’s consolidation of power, header bidding and so on – emerging intact after each.

“Any industry that makes money has people who try to exploit it,” Cadogan says. “In our case, because we had experience in the search business, we had kind of lived this before. As search fraud became harder to perpetrate, a lot of these bad actors moved into this new market because they could use some of their techniques and modify them.”

OpenX will spend $25 million on quality initiatives this year, and 30 staff members focus on the issue. Do buyers notice?

“I think they do when they know about it,” Cadogan says.

Also in this episode: the implications of AT&T’s AppNexus acquisition, life after header bidding and business models in ad tech.

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