OpenX, the London-based startup that offers the open-source ad server by the same name, is moving into the sales side of the advertising business with the launch of a new online ad market.
OpenX Market enables advertisers to bid for impressions on participating websites using an auction format.
Publishers using OpenX Ad Server can easily opt into participating by checking a single box next to their campaigns from within the Ad Server interface. OpenX allows a minimum price to be set and OpenX Market ads will only be displayed if OpenX can meet or beat that price. Advertisers and third party data providers can add their own targeting data to the marketplace, which OpenX hopes will add value to its inventory.
According to OpenX CEO Tim Cadogan, "We are fully integrated to handle premium and remnant advertisings, and can work with agencies, direct advertisers, and ad networks".
OpenX claims that over 150,000 websites use OpenX Ad Server and that those websites collectively serve more than 300bn impressions per month. That type of volume means that OpenX Market could become a player in the online ad market if it is able to leverage its publisher base to build up a significant inventory.
Of course, the key to the success or failure of OpenX Market is dependent upon two things: getting enough publishers with quality inventory and getting enough advertisers with real money to spend. Obviously OpenX's 'meet or beat' proposition is designed to eliminate publisher resistance to participation but getting blue chip advertisers could be difficult, especially in this environment. As an online publisher myself, I've never experienced optimal results using ad exchanges, marketplaces and general networks, so it will be interesting to see how this pans out.
In the meantime, OpenX's move is another example of how open-source doesn't mean 'non-profit'. From MySQL to SugarCRM, OpenX joins the long list of open-source companies that have come up with profit-seeking strategies. For those that can pull it off, it may be a win-win for everyone involved, as a new study suggests that open-source software could save companies in the US $387bn in development costs.