AppNexus Acquires MediaGlu; YouTube's Force

Here’s today’s AdExchanger.com news round-up… Want it by email? Sign-up here.

AppNexus Shops Again

AppNexus acquired cross-device advertising startup MediaGlu, bringing its combined M&A outlay this year to a whopping $200 million (most of it spent on ad server Open AdStream). “We have a tremendous opportunity to redefine how advertising on the Internet works,” AppNexus CEO Brian O’Kelley told Forbes. “And a lot of that means buying key technologies.” But O’Kelley’s gunning for an IPO. “I look forward to being public because we can stop talking about who is bigger,” he said. “I think our story is better transparent than it is opaque.” Speaking of transparency, read AdExchanger’s feature on AppNexus’ fraud woes.

Inside YouTube

In a deep dive on YouTube and its chief, Susan Wojcicki, The New York Times portrays the video service as a “cultural force” with (so far) limited upside. With $1.1 billion in 2014 ad revenue, it still amounts to less than a hundredth of the traditional TV market. “Despite YouTube’s size, a tiny fraction of it is what we call ‘TV replaceable,’ content where we would take TV money and swap it over to YouTube,” said a source. “It’s a funny thing to be sitting on top of something this massive and not really be able to totally control what you’re selling advertising against.” YouTube is experimenting with subscription-based services as another way to monetize. More.

Next Year’s Changes

Speaking to The Drum, Financial Times ad ops director Anthony Hitchings sees a price shift on the horizon within programmatic buying, and he predicts a disintermediation of SSPs. “Expect to see a change in the structure of tech fees with a shift toward a CPM fee rather than a percentage share,” he said. “Branding spend will see a move from an auction model to a programmatic guaranteed model. There is potential as this happens for the supply-side platforms … to become redundant. Instead demand-side platforms could be integrated directly with publisher ad servers on a CPM model and allowed to cherry pick impressions.”

Facebook, Hit Maker

Facebook’s six-month-old mobile ad network may be the rare case when the company nails an ad product on the first try. According to a Fiksu study, Audience Network delivers strong performance at a fraction of the cost of other mobile display networks. Press release. The WSJ picks up the research, focusing on the difference between FAN and the Facebook news feed. The latter had significantly higher response rates. But! “The conversion rate [for Facebook Audience Network] was much higher — 26.28% for the ad network, versus 16.61% for ads on Facebook.” Read that.

History Repeating

In his final piece for The New York Times, ad columnist Stuart Elliott looks back at a quarter century of advertising and concludes the only constant is change. “As transformative as recent changes have been for the advertising business,” he writes, “are they more wrenching than the disruption caused by the rapid rise of television as an ad medium in the 1950s?” Read it.