Adtech firm OpenX unveils an industry-changing fusion of real-time bidding and ad networks

Advertising technology company OpenX today announced an impressive new product, dubbed Demand Fusion, that brings together a real-time bidding platform and ad network demand.

Traditionally, supply-side platforms (SSPs), which focus on serving publishers and their ad inventory, have siloed ad networks and real-time bidding (RTB). While some players offer publishers the opportunity to choose between an RTB and the flat pricing of ad networks, none have been able to combine them dynamically up until now.

Demand Fusion works by holding open an RTB auction while also gathering ad network demand. The highest auction bid will act as a minimum guaranteed rate for the publisher’s impression even if all higher-priced networks default on their option to purchase an ad.

OpenX is able to build its unified marketplace because it operates one of the two global full-stack advertising services. The other full-stack player is Google, which caters its advertising offerings more for advertisers than publishers.

The groundwork for Demand Fusion came with OpenX’s acquisition of SSP LiftDNA in 2012. From there, it took the past two years and extensive resources to develop Demand Fusion. Initial launch partners for the product include YP, TVGuide.com and The New York Observer.

One of Demand Fusion’s benefits is that it does much of it works from within your browser window instead of having to continually check back with an ad server. In doing so, it manages to cut down on loading times and avoid some of the breakdowns in communication from having to relay back and forth.

Jason Fairchild, OpenX’s Chief Revenue Officer, said in an interview that ad tech companies have tended to focus their efforts on demand-side targeting and buying technologies, but OpenX set out to level the playing field by enabling the same kinds of micro-level decisions for sellers as buyers.

“What we’re talking about is the ability to connect all demand channels from a publisher perspective to one universal marketplace,” Fairchild said.

Data from early partners showed that Demand Fusion can drive as much as a 25-40 percent increase in yield for publishers.

According to Fairchild, no other company has achieved this combination of real-time bidding and the ad network model because it’s technically difficult.

“If you think about it, they’re two fundamentally different marketplaces. To combine them, you have to rethink even your auction mechanism,” Fairchild added. “Everything is radically different.”

Sifting through all the adtech terminology can be difficult in its own right, but the simple answer to today’s announcement is that OpenX’s new Demand Fusion advertising platform is a potential industry gamechanger because it introduces direct competition between real-time auctions and ad networks.

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