Orange aims to get exchange market share to 10-15%

NMA 29th June, 2011

Orange expects to have a 10% share of the ad exchange market by the end of the year as a growing number of publishers put their inventory into its exchange, as well as the addition of mobile web inventory.

The operator said its ad exchange revenue was up 30% from May due to a breadth of new inventory from new publishers and increased spend from trading desks.

According to Nigel Gilbert, head of Orange Ad Market, while Google has a 60% market share, Orange is looking to achieve a 10-15% presence by the end of the year, with the addition of mobile web inventory a major contributing factor to this.

Orange Ad Market’s monthly revenues have been boosted by the addition of a number of publishers, Gilbert said, meaning it now offers a more diverse range of inventory.

“We also have all of the [ad network] Unanimis sites, and we can quickly bring on board any publisher that wants to join the exchange. We’ve added several new ones. This new inventory is a reflection of the spike we’ve seen,” said Gilbert.

He added that CPMs on the exchange have been averaging around 80p, with a fill rate between 15% and 40%. He described the exchange inventory as “eclectic”, with a mix of premium and lower-tiered non-guaranteed inventory.

While Orange is looking to mobile display inventory to help grow its real-time bidding-enabled exchange, Gilbert acknowledged that the absence of a universal cookie on mobile (which would facilitate the real-time bidding process) makes automated trading, or dynamic buying, more complex.

Orange can get around the absence of a universal cookie on mobile by using its operator data, he said.

“Ours will be mobile internet. It’s still going to be complicated, but we can match publisher site data and have a much more robust data offering to push forward with. Within apps, advertisers are buying on a CPC basis, but you don’t know who it is and you’re not matching data to anything,” said Gilbert.

He acknowledged that it’ll be difficult for real-time retargeting to exist without such a cookie. “I’m not convinced that retargeting will be a mobile option,” he added. “If you can’t retarget on a cookie, you can still buy extremely tight data on the other side. In mobile, the only people with the data are the mobile operators.”

Brian O’Kelley, founder of the AppNexus platform on which Microsoft’s newly launched UK exchange is built, told new media age last week that Microsoft’s decision to add Windows Phone 7 in-app inventory was a signal that mobile advertising is becoming a key part of the display ecosystem.

The expansion of the Microsoft Exchange, he said, is set to have a “significant” impact on the European ad market (nma.co.uk 21 June 2011).

“Microsoft now lets ad networks, demand-side platforms and advertisers bid for the exact advertising impressions they wish to target, for the price they want to pay at scale,” he said. “This technology will enable greater efficiencies for the UK’s online ad market as well.”

Last week, Microsoft Advertising announced the launch of its ad exchange in the UK. The real-time-bidding-enabled exchange, which launched in the US in April, will offer Microsoft Windows Live and non-guaranteed, or remnant, PC display inventory to buyers based in the UK and The Netherlands. Windows Phone 7 in-app inventory will also be available globally.

Microsoft will bolster the exchange’s inventory supply by adding third-party publishers later in the year. Further expansion is planned for Canada, France and Germany in the coming months.

According to display ad industry commentator Ciaran O’Kane, while Google’s ad exchange “ticks the box on audience targeting”, it will never “satisfy the contextual requirements of some brands”. Microsoft’s move is seen by many in the data-driven display space as a necessary counterweight to the growing influence of Google, he said.

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