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compared to the VC windfall recently bestowed upon buy-side start ups – but my prior complaints are quickly becoming outdated.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).
There are two main reasons why these two data points are not in conflict with each other. The first is that the site we reviewed was Humana’s public site. People who visit this site do not necessarily join a Humana plan and only comprise a fraction of the total Humana customers captured in the CxPi. Humana’s membership comes from a variety of sources, including employers and the military. None of those members would use the public quoting capability, which makes up most of the experience we tested. So members who do join Humana via the public site experience would ultimately be dwarfed statistically by those who didn’t.
Google’s product strategists just announced the launch of Google Wallet — an NFC-based mobile payment solution. As my colleague Charlie Golvin pointed out, this is another early salvo in what will be a long and hard-fought battle to change consumers’ payment behavior and, as a potential result, the makeup of the payments landscape.
We have covered this issue in more detail in a new Forrester report “Google Wallet Is Not About Mobile Payments.” Clients can access the report here.
Given its core search business and ad-based revenue model, why would the company make that investment? Because Google’s product strategists’ focus is not on the payment itself; it’s on all of the other elements that comprise a commerce experience and the data that characterizes those elements.
Indeed, appending real-world purchase information to its treasure trove of online behavioral data will vastly increase the value of customers’ profiles and increase the rates Google can charge its advertisers. It will be a way for Google to increase its local presence. NFC is too often equated simply with payments, but Google understands that NFC tags have broad application (working like Quick Response [QR] and other 2D barcodes do today). Google can help retailers use NFC tags for in-store promotions and check-ins, augmenting the understanding of customer behavior for ad targeting.