Growth Doesn't Happen Behind Iron Curtains

By Jason Fairchild, Co-Founder and CRO of OpenX

Churchill's reference to the Iron Curtain in 1946 was meant to create a dark and gloomy picture of what would happen when the eastern bloc was cut off from choice, innovation and the efficiency of open markets. Dramatic and accurate, his point that limited competition leads to limited growth played out precisely as predicted.

A similar danger exists in advertising technology today. Publishers are led to believe that they must choose one technology partner for all solutions or lose the benefit of tight integration and access to "unique demand." The problem in that scenario is that the publisher gets cut off from choice, innovation and access to the open market. Sound familiar?

The Power of Choice

Programmatic powered marketplaces provide participants with more competition and control
than ever before.  While there is always room for improvement in any system, both sides can now see a much clearer picture of what's available when, and at what price.  Sophisticated programmatic exchanges provide access to more demand; the increase in competition drives higher yield.

This kind of virtuous cycle is driven by open competition and can only exist in an open environment. Publishers in closed environments, behind iron curtains or restricted to a single-stack solution, are left with a single path to profit.

Cui bono.

Technology providers who restrict publisher partners to a single path to profit have a solid reason for doing so: their technology is often built to exclusively benefit their media business - at the publishers' expense.

We see this conflict of interest today when technology providers exclusively bundle their ad exchange with their ad server.  It often just so happens that the majority of demand on that ad exchange is generated by the tech provider's media business, and there is often no transparency around how inventory pricing is set and shared with the publisher.  Getting locked in behind the curtain means getting locked out of the open market.

The only way to overcome the inherent inequity and conflict within closed systems is for publishers to engage with platform providers and marketplaces that deliver the option of access to market demand.

Open Season

"Open" is not only in our company name, it's in our company DNA. We are dedicated to the perfection of marketplaces that securely facilitate increased competition for our publisher partner inventory because we believe it is the only way to ensure publishers are seeing and receiving the highest value for their inventory. We are relentlessly driven to create full access solutions because we know that iron-curtain barriers limit publishers' ability to generate maximum competition, and as a result, maximum yield for their inventory. A great example of where we've pioneered a circumvention of closed ad tech environments is our Bidder product, introduced 18 months ago, roughly a year before anyone else. Bidder allows publishers to implement a monetization solution that opens up access to more demand within traditionally closed environments.   For every single one of our Bidder clients the access to increased demand across platforms has increased competition for their inventory, driving up prices and yield.

Publishers want openness.  In fact, in recent research conducted by OpenX we found that 80% of publishers surveyed were hesitant to operate with a single-stack solution, correctly concerned that doing so would limit their ability to grow their business. As new programmatic technologies are being adopted to address mobile, video, Programmatic TV and the Internet of Things, publishers should avoid getting locked into yet another closed system.

Tear down this wall.

Winston Churchill once said: "Those who fail to learn from history are doomed to repeat it." We couldn't agree more. That's why we're committed to creating and scaling open marketplaces that are vibrant, healthy and unconstrained by walls and curtains.  And that's also why we encourage publishers to learn the valuable lessons from the "Iron Curtain" tech stack era, and embrace free and open tech stacks that provide open access to all marketplaces.  In other words, "Mr. Publishers, tear down this wall!"