Not content with revolutionising the buy-side of the adtech ecosystem with its open exchanges and demand side platform offerings, AppNexus has firmly set its sights on one of Google’s core advertising products, DoubleClick for Publishers, which powers a vast section of the Internet’s online advertising and dominates its sector.
With the launch of Publisher Suite, AppNexus hopes to offer a real alternative to DFP and lure away from the Google ecosystem those marketers who have traditionally been underwhelmed by DFP but left without any viable alternate option. AppNexus acknowledges that such is the strength of DFP that a large number of marketers have grown up and built careers around using DFP as a platform and hence it could prove difficult to lure this audience away from familiar surroundings.
It hopes to do this using a very simple tactic: create a better product than DFP based on cutting-edge technology; sign up some key customers; prove their revenues have increased.
The first generation of the product has now launched and is intended to both do the basics better than DFP and also provide new functionality. With a new high-powered ad server arising from the combination of two of AppNexus’ purchases (OAS and Yieldex), the ability to compete direct-sold deals with programmatic inventory via a unified demand platform and AppNexus’ traditional tenets of an open platform with transparency guaranteed, Publisher Suite certainly appears to be a compelling offering.
In terms of reference clients, AppNexus has already (perhaps unsurprisingly) attracted Microsoft to its platform, who has rolled out adoption of the new product across 10 European markets. As to whether revenues increase, it remains too early to be seen. Generally sentiment seems positive, however.
An ever-growing David vs Goliath?
One particularly interesting aspect of the announcement is the manner in which AppNexus has directly targeted Google in the development of the new product and its communications relating to the launch. Clearly this is part of a wider strategy – AppNexus is going out of its way to position itself as not only the clear alternative to Google but is attempting to differentiate itself in a way so as to make it the front-runner. This was clearly demonstrated at the Publisher Suite launch where the rhetoric put DFP directly in the cross-hairs – comparing the 10 year-old “flip phone” technology powering DFP with the purpose-built, sophisticated “smartphone” technology developed from the ground up by AppNexus.
With an estimated value in excess of $1bn, AppNexus is clearly dwarfed by the $500bn giant of Google (well, Alphabet Inc.). However, AppNexus has managed to do what so many before it in this sector have failed. It has established itself as a true competitor in this space, the heartland of Google’s revenue-generating business, rather than an also-ran. Furthermore, AppNexus’ growth rate is staggering (estimated at well over 100% per year) and it runs profitably rather than relying upon future promise of revenue to secure hugely speculative funding.
It is still relatively early days for AppNexus (it turned 8 this year) but all the signs point to it growing up from a start-up to a true global force. It has powerful backers (who are also investors with a vested interest in AppNexus’ success) in the form of WPP and Microsoft and immediate access to a vast inventory of advertising (and associated revenue streams) both buy-side and sell-side.
Can a start-up from New York born from the ashes of Right Media take the fight to the advertising behemoth that is Google? Or will AppNexus be just a small irritation which flares up only to quietly subside? It remains to be seen. It is certainly the case, however, that many in the industry will be watching with baited breath to see the outcome.
Whatever the result, one thing is certain, the challenge posed by AppNexus and others like it will revolutionise adtech as we know it and result in better technology, better products and better levels of transparency coming from all players. And for that, the industry as a whole should be thankful.