Add to iTunesScott Switzer, CTO & Founder OpenX
Introduction
On this episode of Read/WriteTalk, I talk to Scott Switzer the CTO and founder of OpenX. OpenX is probably better know as OpenAds, but recently was renamed. They have been a leading open source ad server for years and currently are one of the largest ad servers on the web. In the interview, we talk about Scott’s vision for his company and the ad industry in general. As Microsoft and Google continue to acquire ad servers, I believe OpenX will increasingly become a critical counter balance in the industry. So I’m really glad to have had Scott on to share his vision.
Links
- OpenX Blog
- OpenAds FOSS Ad Network Goes Hosted, Raises More Cash
- Read/WriteWeb posts about Google’s Vulnerability - Open Ad Network
Editors note: this interview was recorded before Google announced their free “Ad Manager” for small and medium size publishers, but Scott has a post on the OpenX blog about this.
Transcript
| Sean Ammirati: Welcome to another episode of ReadWrite Talk, the people behind the web. Today I have Scott Switzer, the CTO and founder of OpenX, formerly OpenAds on ReadWrite Talk today. So Scott if you could start by maybe just giving us a quick overview of the OpenX company and the products that you guys offer.Scott Switzer: Sure. The history of the company I guess is it goes a lot longer. The company is only nine months old or so. The history goes back to 1999 where we an open source ad server that was originally called PHPAds.
And what an ad server does is that is an application where you can manage your Google AdSense or other advertising that’s on your website. And it will automatically rotate through different types of ads and maintain your advertising for the website. |
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| 02:08 | I guess the history is that we started it ‘99 and in 2003 it became phpAdsNew and really took off in terms of providing functionality that was close to that of DoubleClick in terms of managing advertising. And that’s when I got involved. And they were basically myself and two other developers. So we’re really rigging the charts there.And then a couple of years later I became the community leader. And at that time there really wasn’t a lot of work, of people looking at the community and what the community wanted. So we really decided to create a company that focused our energy around what the 30,000/ 40,000 publishers on the web were looking for in terms of ad serving. |
| 03:09 | Sean Ammirati: Yes and when you were at phpAds, were you actually at an agency at that point? Is that who had responsibility for phpAds at that point?Scott Switzer: Yes. I worked for an agency in the UK called Unanimis. And basically Unanimis funded all of the efforts that we did in order to take phpAdsNew and make today a scaleable ad server for Unanimis. And at that time we were serving in the billions of ads across websites like the BBC and Ticket Master and a number of very well-branded sites in the UK. Sean Ammirati: I guess they only point out because I think it’s interesting so many of the people in this space myself included have a computer science background. I understand to you as well but coming from the industry I think you see a little bit of a unique perspective on some of these challenges. |
| 04:05 | Scott Switzer: Oh yes. And ad serving is very, very complex. And even though it’s as seems like a fairly simple thing. Just rotate a couple of banners but it’s all about algorithms and data collection and if you have a computer science background I mean it’s just a fantastic place in order to see mountains and mountains of data coming through.Sean Ammirati: Sure. And speaking of mountains and mountains of data, you were starting to touch on this. What is the sort of current statistics in terms of how many ads are served via OpenX and how many publishers do you have?
Scott Switzer: There are between 30,000 and 40,000 publishers. Those publishers use OpenX on over a hundred thousand domains in a hundred countries around the world. And collectively these publishers serve in the hundreds of billions of ads per month. So that’s pretty significant percentage of online advertising. |
| 05:14 | Sean Ammirati: Do you have a sense of how that compares to say DoubleClick, their ad server or the other? I guess it’s open ad server.Scott Switzer: Open ad stream.
Sean Ammirati: Open ad stream, I’m sorry. Scott Switzer: DoubleClick, I have no idea but I’ve heard that they’re somewhere between 250 billion and 500 billion ads per month. Sean Ammirati: Ok. Scott Switzer: So I guess it’s in the same league as OpenX. Sean Ammirati: Yes, so comparable. And then just recently you guys announced a new service, the hosted service. You want to talk a little bit about that? Scott Switzer: Sure. One of the main reasons why somebody we go on our forum and complain with in terms of what it takes in order to download, install, maintain, configure a copy of OpenX. |
| 06:16 | And basically what we decided is that especially for people who don’t have a computer science background, for people to be able to automatically create a new account and get up and running as quickly as possible. And that’s really what we are creating at the moment.And as you can imagine that takes a lot of work in order to build out the infrastructure in order to manage that type of volume. That’s currently what we’re doing right now through our private beta.
Sean Ammirati: Cool! And that also obviously significantly closer to the publishers. I really have some questions around your road map on that. Any plans on becoming like an ad network or an ad exchange? |
| 07:12 | Scott Switzer: Currently what we’re doing is we are focusing on building features for publishers. And really making sure that we can be as widely used as possible and I guess the real goal for this year is to make OpenX simple to use. And then also equally expandable. So that there’s the robust plug-in API and there’s a robust web service with API. So that it can be used whatever configuration a publisher needs.And our future plans in terms of becoming a network or an exchange, I think that the way that I see it is that we have a unique tradition in terms of our ability to sit in the middle and provide a market place or try to find the right advertisers, agencies and ad networks for a publisher. |
| 08:21 | And in terms of how we do that, we haven’t really disclosed anything at the moment. We’re really still focused on our blueprint.Sean Ammirati: But I mean I guess as you think about sitting in the middle there, that would be very much I think how someone like Right Media might look at their place in the ecosystem as well.
Scott Switzer: Sure. I mean the I guess the difference is that eventually OpenX hopes to integrate with Right Media. It already integrates pretty well with Ad.com and any agencies or advertisers that use DoubleClick. I think that our focus on integration and in open |
| 09:17 | Sean Ammirati: Certainly. No, I’m not saying that you guys are the same thing at all. I guess maybe more to the point. It seems like an obvious business model. But when you guys talk about business models for OpenX going forward, what are the things that jumped in mind?Scott Switzer: A couple of things. One significant need that OpenX publishers really have been vocal about is for us to create support for them. So that if there are problems and any phase that you have questions for us to be able to have the infrastructure in place to answer them which is currently something that we don’t have in a large amount of scale. But we hope to get in the near future. |
| 10:06 | I think that the next thing that we think about in terms of the business model is finding the best way for publishers to monetize their site. And I guess that really gets to the core of what publishers want. I mean they basically want the biggest check at the end of the month.And how can we help them do that. Well we can help them by trying to build efficiency inside the advertising market place which isn’t very efficient today. And that manifests itself in a couple of different ways. One by getting our publishers better rates for ad networks than they could by themselves.
Another could be for our publishers to be able to take direct ads and build a workflow so that advertising can be purchased directly from them without having to go through multiple emails and a IO process and payment process and that type of thing. |
| 11:21 | And another could be for ad networks to be able to take particular parts of inventory packaged up by publishers in a way that’s attractive for advertisers, ad networks. Those are three very specific things that we’re looking at things.Sean Ammirati: Sure. And I guess all those to me point back to either ad networks or ad exchanges but on the sort of first part of that I guess MySQL going to Sun for a billion dollars, you can’t scrunch you nose at the support piece of the equation either. |
| 12:03 | Scott Switzer: No. I mean nobody would use a product in an exclusive fashion without knowing that they have support. And that’s something as websites get bigger and more for revenue exchange to the company. That’s something that gets to be more and more mandatory.That’s something that we hear loud and clear. And we’re figuring out ways in order to provide that to our publisher base. And it’s not an easy thing. And then we have a lot of publishers both big and small and they have such a diverse set of requirements that we’re trying to figure out the best way to do that.
Sean Ammirati: Yes, it’s very interesting. I guess for people who don’t know I have been long fascinated by your company and written about you guys a couple of times on ReadWrite Web. |
| 13:01 | Scott Switzer: Yeah I appreciate it.Sean Ammirati: More with the hope that someday you guys become in that open ad networks. So these are maybe hopes of mine as well which is a bit whether you may feel like loaded questions. So enough of those.
Let’s step back and talk a little bit about the advertising market in general. Because where you sit being at the scale you are, I think in Scott Switzer: Let’s see. What excites me? As a tech guy I think that the thing that is so interesting about online advertising, the fact that it’s growing so much and there’s a lot of money involved I’ll put that aside. |
| 14:03 | It’s just that for the first time you can really track a viewer’s interaction with advertising. And it’s starting with performance advertising and you can track which ads actually led to the purchase of a product. Even though that in online advertising that’s simple these days, just think about how difficult that is to do with any other advertising medium.And that’s why so many people rushing to online advertising especially in performance advertising, you can see within a couple of days if and and works or it doesn’t. You don’t need to go through focus groups over months in months in months if you should have this ad or that ad or this campaign versus that one.
That’s one thing that’s just really interesting to me. And I think that in the future, brand advertising is going to have the same types of metrics and the new ways of measuring brands. And that type of thing online is going to be fantastic. |
| 15:16 | Sean Ammirati: Cool! On that just to play contrarian for a moment, do you think the agencies are ready to buy that way?Scott Switzer: To buy? Sean Ammirati: To buy with these more metrics driven. I mean my impression is that a lot of the agencies don’t want to have Scott Switzer: Yes. And you know lead generation, search, a lot of that I would group all of the affiliate marketing I’d group into |
| 16:13 | I mean this is something that a lot of agencies are getting into. I think that whether or not agencies want to do this I mean this is core to what an advertiser wants to do. They want to have their budget be accountable.Sean Ammirati: So it makes sense to me how you can cost per click when you’re doing lead generation. But again sort of playing contrarian here, the money right now that you’re spending on brand advertising around like Super bowl ads, what metrics would you imagine replacing the sort of CPMs that are in place now? Scott Switzer: Well, some of the things that you can take from television like reach and frequency. That is already available The immersion level are probably metrics that we’ll see in the future. |
| 17:32 | Sean Ammirati: Cool! What about what’s concerning you about online advertising right now?Scott Switzer: Well I haven’t seen it and our numbers haven’t shown it but obviously a lot of people talk about a downturn in advertising. That I’m sure it concerns not only people in advertising but probably in the larger economy as well. |
| 18:05 | I think that another concern is just the availability of different options for publishers. I think that there is getting to be fewer and fewer options that a publisher can use in order to monetize their site. Not only from the technology perspective but also from an ad network perspective. There’s a lot of consolidation in the industry that is fine and healthy but it just can’t go to far.Sean Ammirati: Yes, I think that’s good and timely. So there’s obviously a lot of buzz right now around social media and sort of monetizing the “social grapht”. Scott Switzer: Yes. Sean Ammirati: As you’re talking to these agencies right now, what’s your take on all of that? Scott Switzer: Well I’ve spent a lot of time talking to, there’s a lot of new companies that had just received their initial |
| 19:17 | But the data that you can get from Facebook and MySpace and how that manifests itself into advertising is something that’s going to be pretty cool. And there’s a lot of ad networks out there that are basically optimizing ads based on the social graph. And that’s been proven. And that seems to resonate with agencies as well with the new buying metrics that is pretty cool.Sean Ammirati: Cool! Are any of those networks plugged-in to OpenAds at this point?
Scott Switzer: We talk to so many different ad networks and in general an ad network can plug-in to OpenAds with little or no integration effort. |
| 20:09 | And so a lot of networks that I don’t even know of use OpenAds or powered by OpenAds or basically OpenAds integrates with them. In terms of a deeper level of integration, we’ve spent time and resources on some of the existing technology out there like Atlas and Double Click and Google AdSense. We haven’t had a deep level of integration with the social graph network yet. I imagine that if we don’t do it, people in our community will.Sean Ammirati: That’s actually something I’m curious about that I meant to ask you earlier. How active is the community outside of OpenX in terms of working on the server? When people talk about open source projects they talk about sort of the employees of the company. Now they’re people. Do you have a lot of people outside contributing to it? |
| 21:08 | Scott Switzer: Yes. It’s interesting.
We have a pretty unique community. In that if we want to test something or run something by people or test product ideas, when we announced on our blog that we were having a hosted version, we easily got to a thousand interested parties in dozens of countries almost immediately. When we are releasing a product that allows advertisers to pay publishers directly, we can pretty easily get focus groups of hundreds of publishers from around the world. And that type of community involvement is really, really important to us as we build products. |
| 22:06 | So that we can basically not build stuffs in a silo. We’re trying to include as many people as possible. And then in terms of development resources, there are a lot of companies that build upon OpenAds and integrate with OpenAds in a number of different ways.And then there’s a growing number of plug-ins that can be used with OpenAds for example, geo-targeting and things like that. We’re spending a lot of time building a plug-in API so that we can standardize that. So that community grows even more. Sean Ammirati: Really! So the plug-in API would let I guess contextual geo- targeting and behavior targeting? Is that basically What would be other examples of plug-ins? |
| 23:08 | Scott Switzer: Well, there’s a couple of examples. One plug-in could be for our optimization engine to optimize on the advertiser’s numbers rather than the publisher’s numbers. Because that pays the bills for example. Another plug-in could be exactly what you talked about for a behavioral company to integrate the information that they need into a cookie.There’s all kinds of plug-ins already to target on specific variables. So if let’s say that your website uses search terms in a variable that’s lets name Q, you can basically automatically parse out that information and target based on that. There’s plug-ins that can be built to add fields to our database. If you’re a UK based firm and you want to store the V.A.T.number for an advertiser, you can do that for your own payment purposes. |
| 24:16 | I mean there’s an endless number of ideas in which to integrate. And you know a standard plug-in API would just help people who build those APIs so that they can easily upgrade to new versions of OpenX without having to rewrite the customizations that they’ve done.Sean Ammirati: Yes I know. I’m aware that you guys had this. People who use WordPress obviously I think can understand what you’re saying. Wow! It’s really an interesting idea. Really cool! Scott Switzer: Yes. Sean Ammirati: So I guess we’re kind of wrapping in terms of time here. I’ve actually already gone over which I anticipated. [Laughter] |
| 25:00 | Sean Ammirati: No, no. I’ve wanted to. This is an interview I’ve been looking forward to for a long time. One last question though for you Scott is, so you’ve started at phpAds and then OpenAds and OpenX, what’s been the sort of biggest surprise to you as this whole product and company has evolved. Sort of the biggest take away that you’d like to share with the audience.Scott Switzer: I think that one of the biggest takeaways is that over the years I’ve been involved in a number of businesses. And it’s amazing how an open source product or community development is so much different with the community than it is with a close source product. You almost think of your test team as the people that you have internally and hundreds or thousands of people externally. |
| 26:13 | And other things, coming up with new ideas, closed source companies basically bat them around internally, talk about them and then release something. And an open source company write the blog about an idea and develops it with the community before it becomes anywhere near a product spec or in the product. It’s just is a very powerful way of building products today that didn’t really occur in the 1990’s or early 2000.Sean Ammirati: That’s a great answer! And a really good point. There’s certainly a whole number of these open source companies I think that are proving that out in the market place today. |
| 27:05 | Scott Switzer: Absolutely! And I imagine that it really takes time to get that into your company’s DNA. And that’s something that’s really special about Open X. And something that we really want to continue to foster and enhance going forward.Sean Ammirati: Yes. Well good luck with that. And I really thank you for joining me today on ReadWrite Talk Scott.
Scott Switzer: All right thanks a lot Sean. I appreciate it. |
March 18th, 2008 at 7:36 am
[…] have an excellent interview with Switzer that provides some further flesh to the OpenX approach to the ad serving […]
March 27th, 2008 at 8:19 am
Il 4 aprile ad Ancona un seminario gratuito su OpenX. Interverranno dal Londra i responsabili di OpenX. Tutti i dettagli qui http://www.anso.it/openx/