OpenX strikes a $110 million partnership with Google

OpenX has become the first major ad exchange to move completely to the Google Cloud. The recently-announced five-year, $110 million partnership between OpenX and the Google Cloud Platform, is reported to be the first step toward its strategic move into people-based marketing. Before moving to the cloud, OpenX operated from 15,000+ owned servers in five locations worldwide, only using cloud for specific projects.

The brand has opted for this move because a completely cloud-based infrastructure would offer a much more efficient platform with greater flexibility for innovation and much lower latency. This move opens up new capabilities for higher optimization and a faster scalability. It also frees up about 25 percent of OpenX’s skilled resources to work on development jobs.

While OpenX claims that cloud is not their only differentiator, it is their recent adoption of the people-based marketing (PBM) – an approach where ad targeting is focused on identified or anonymous profiles of individuals, as defined across all channels/devices and in the real world, which allows a brand to better develop a relationship with its own customers. This makes it easier to identify similar people as prospective new customers, and to direct more personalized better targeted ads at them. Later this year, it is reported, OpenX will announce new products that are oriented more toward PBM, although it will continue to service other kinds of targeting. But the move to the cloud, OpenX CTO Paul Ryan is reported to have said, is “the first step in enabling PBM in a way no one has done before.”

The biggest issue, OpenX CTO Paul Ryan is reported to have said, is “bringing the one-to-one targeting of walled gardens to the open Web.” The three biggest walled gardens are Facebook, Amazon and, ironically, Google.

OpenX’s trillion transactions per day provide massive customer data, and its relationships with demand-side platforms give the brand access to cross-channel consumer IDs.

This is a significant market move since almost every piece of software offered to marketers and advertisers is or will soon be cloud-based, and this smart move by OpenX’s will probably be duplicated in the near future by every other exchange. What’s not so new is its emphasis on people-based marketing that could represent a milestone in the adoption of this ad targeting approach, with its emphasis on consistent consumer connects across devices/channels and in physical environments.