OpenX: impressive growth, new software version

A press releases and a software upgrade from OpenX were published almost at the same time yesterday. Almost 1 year after joining OpenX as CEO, Tim Cadogan picked April fool’s day to make some very serious announcements.

The first story was a press release about the phenomenal growth in the usage of the OpenX Ad Server product and the accompanying OpenX Market. A few highlights:

• More than 8,000 publishers have opened accounts on OpenX Hosted, together serving about 5 billion ads per month.
• OpenX Ad Server has been downloaded and installed by more than 35,000 publishers, and together they serve a huge number of ads, estimated at 300 billion per month.
• OpenX.org Ltd is doing very well in the transition from being a developer of open source software into a commercial company offering software, services and monetization opportunities. In spite of the economic climate, revenues are increasing. Even more important in my opinion: the potential for OpenX Market is not just a concept anymore, because participating publishers can tell from their revenues that OpenX is also generating revenues.

Just a few hours later, a major new software release was announced on the OpenX company blog: OpenX Ad Server version 2.8 is now available to anyone. It has some exciting new features and benefits, including the new plugin framework, general availability of OpenX Market, and improvements in the user interface, scabability and performance. More about the new software in my earlier blog post.

Measuring cost per action advertising

In the first article in this series, I suggested changing the pricing of advertising campaigns based on impressions to pricing them based on the number of clicks. And in the second article, I went a little bit further and argued that it might be even better to agree on a cost per action pricing scheme.

If an advertiser is considering ending an impression based or click based advertising campaign, a publisher could try to turn the relationship into a partnership by offering CPA (cost per action) advertising. In that scenario, the site publisher will get paid for a specifically defined outcome that the advertiser is aiming for.

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Moving to cost per action advertising

In the first article in this series, I discussed switching from CPM to CPC campaigns (see that article for an explanation of these terms). In this second article, I’ll go one step further than just getting paid for clicks, by introducing conversion tracking.

Advertisers don’t buy a campaign because they like the site’s publisher. Their business goal is to increase sales. While there is a place for just raising brand awareness, ultimately it’s all about bringing in potential buyers, presenting them an attractive offer for a product or service, and completing the transaction.

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Switching from pay per view to pay per click

In the past few weeks, I’ve talked to a number of publishers who had a remarkably similar story: advertisers are starting to cut their ad budgets, and as a result site owners see their ad revenue decline. Whether or not it is a good idea to reduce advertising budgets is not my call, only time will tell. But for site publishers, it’s a real problem.

In a series of articles, I’ll present steps publishers can take to act on this trend. You’ll see that the overall strategy is to reduce the risk for advertisers and to find ways of adding more value than just offering display advertising. In this first part, I will discuss switching from CPM to CPC campaigns (I’ll explain these terms below).

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