OpenX Acquires LiftDNA: Q&A With Jason Fairchild, Chief Revenue Officer, OpenX

Just in time for the IAB's Annual Leadership Meeting in Miami, ad server and exchange (and, not to forget, Publisher Forum Palm Springs sponsor) OpenX has boosted its already impressive product portfolio through acquiring supply-side platform LiftDNA. OpenX Chief Revenue Officer Jason Fairchild found a free minute to give us the details on the merger, which he says transforms OpenX into "the only fully integrated revenue stack – the combination of an ad server, ad exchange and yield optimization platform."

What were the chief forces driving OpenX's acquisition of LiftDNA, and what attracted you guys to this SSP in particular? How did the merger develop?

The primary driver for the LiftDNA acquisition is to help publishers make more money. The best way to accomplish this is to provide publishers with a fully integrated ad platform that incorporates guaranteed ad serving, ad exchange functionality and Supply-Side Platform (SSP) technology, all totally integrated within the ad server.

This is a major innovation that drives improved yield for publishers in three important ways:

1. creating the maximum level of competition for each ad impression, which is the key to driving higher prices and thus more revenue for publishers, by aggregating all third party demand sources, including exchanges, networks, Demand-Side Platforms (DSPs) and SSPs, within the ad server;
2. leveraging deep insights that are only available at the source where inventory is created; and
3. reducing loss and discrepancy associated with sending ad impressions to third party monetization parties that are located outside of the ad server.

This is a totally new approach, and it produces a major step function improvement in revenue generation for publishers. The name for the new offering is "LiftDNA by OpenX."

In terms of how the idea for the combination developed, we have been working with LiftDNA for quite some time and we came to realize that we share the philosophy that SSP functionality should live within the ad server. Our teams also work extremely well together. We decided that given this unusually perfect alignment of strategic thinking, a combination of OpenX and LiftDNA’s breakthrough technology and world-class teams would create a powerful new force in online advertising.

How will LiftDNA's offerings be integrated into OpenX, in particular with other revenue optimization efforts? Will the company's products still be offered as standalone services?

The good news here is that OpenX and LiftDNA have been working on a commercial basis together for nearly two years. This experience has allowed us to refine our approach and validate our results across many publisher use cases. So, we're thrilled to point out that we have the first and only fully integrated revenue stack on the market and it is available today.

Even with this new offering, we continue to believe that choice is very important. If a publisher uses a different ad server, they will not be required to switch in order to take advantage of our new approach. For example, LiftDNA is also integrated with DFP and a publisher using that solution will not be required to change in order to maximize their revenue by using LiftDNA by OpenX.

How do you feel this acquisition shifts OpenX's placement in the ecosystem? Does it change your relationship with buyers?

Even before the acquisition, OpenX had already become one of the world’s leading providers of digital advertising technology. But yes, with LiftDNA by OpenX, OpenX becomes the only fully integrated revenue stack – the combination of an ad server, ad exchange, and yield optimization platform – in the world and we think this catapults us to an even more interesting position in the space.

Our relationship with buyers should only become stronger. The new combination of OpenX Market and LiftDNA represents a massive pool of more than 100 billion, RTB-enabled ad impressions per month. This represents a major source of quality inventory for agency trading desks, DSPs and ad networks. We recently announced profitability for Q4 2011 and a key driver of that achievement was the growth of our exchange, the revenue from which grew by nearly 700% and which was, of course, driven by the participation of buyers. Our organic growth coupled with the growing pool of supply that LiftDNA brings should help our relationships with buyers further scale and mature.

What do you see as the main benefit to your current clientele? Are you afraid of any conflicts?

The main benefit to our existing publisher clients is that now we can help them manage 100% of their ad inventory from within OpenX Enterprise, and we can help them make 50% to 150% more money from their remnant inventory compared to other SSPs or exchanges. That's a huge deal.

For buyers, we now offer multiple ways to buy inventory from OpenX, including via a platform integration with OpenX Market or the LiftDNA by OpenX product, via rules-based bidding within OpenX Market or via a managed service. In each case, buyers will have access to a massive pool of more than 100 billion ad impressions per month.

Again, since both OpenX and LiftDNA are committed to openness and to providing choice to the market, there aren’t conflicts. No one has to switch their ad technology to take full advantage of OpenX or LiftDNA by OpenX.

What do you see as publisher ad ops greatest challenge, and how do you feel OpenX is lending a hand?

By far, the biggest challenge for ad ops professionals is navigating the huge number of confusing options in the ad technology space, and trying to make sense of which combinations of technologies to stitch together to help them achieve their number one objective, which is to make more money. OpenX can help those publishers by offering a simple, one stop ad technology solution that combines all of the major monetization technologies and channels – from guaranteed sales, to network sales, to exchange functionality to SSP tech – all within the ad server. This breakthrough platform is elegant in its simplicity, and powerful in terms of driving results, specifically, driving between 50% to 150% more money for publishers compared to any other available monetization platform.

With an SSP on one side and an ad exchange on the other, what’s the next frontier for OpenX? Thinking about building an agency?

Well, we have a lot on our plate as it is! Seriously, our short-term plan is to focus on executing our current business, which is introducing our groundbreaking new platform to publishers both in the U.S. and also internationally in order to deliver against our mission of helping publishers make more money from their ad revenue streams. Plus we’re already working on extending our full stack platform to be fully device and screen-agnostic so that ultimately publishers can use one platform regardless of what device (smartphone, tablet, laptop, PC, smart TV, etc.) their consumers are using to engage with their content.

Do you want to give AdMonsters readers a leg up on any IPO developments? Ad ops people are investors too.

We’ve been evaluating an IPO because that is clearly an option for us. Currently, we haven’t made a final decision. That said, we’re taking all of the necessary steps so that we would be prepared to do so, should we decide to access the public capital markets.

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