Jun 21, 2007

Ad serving is officially a commodity

Well, this has probably already been the case for years, but in the past two weeks:

*Openads, the "free, open source ad server," announced a $5mm funding, in part to become an open advertising platform. Their core products, Openads 2.o (formerly phpAdsNew) and Openads 2.3, are licensed open source under the GPL.

*Exponential, parent company of ad network Tribal Fusion, released a free commercial ad server.
In many ways these two events are not surprising as ad technology providers rip apart the online advertising stack and attempt to provide real differentiated services (and business models) at points where those services are truly valuable. Ad serving is valuable, obviously, but most publishers consider it an expense, and not an investment. Targeting, analytics, networks and exchanges more clearly result in revenues.

Amit Shah, one of the founders of Openads, writes that one of their goals, is "to allow as many participants in the advertising ecosystem to work together on one platform for mutual benefit."

Whether it's one platform or many, with the price of ad serving trending towards zero (what moves will the non-free serving companies make in the next few weeks?), the company that can, with transparency to the publishers provide demonstrated value in those upper regions of the stack will have an interesting, and I think lucrative, run of the market in the next few years.