Orange teams with OpenX to push Web ads

LONDON, UK: France Telecom's Orange is launching a new platform for buying and selling online ads in Europe, linking up with ad technology company OpenX to challenge offerings from Google and Yahoo.

Orange, in addition to the telecoms operations that bring in the bulk of its $68 billion in annual sales, runs several other lines of business including Europe's largest advertising network, which reaches 343 million users monthly.

It now hopes to exploit an underdeveloped market for online display ads - since most online advertising is in the form of sponsored search results - combining OpenX's global ad-exchange expertise with its own knowledge of European markets.

"It's a fragmented market. There is a lack of transparency," Orange's head of advertising, Luc Tran-Thang, told Reuters. "This kind of move will help the display market to grow."

The Orange Ad Market will launch in Britain and France in the second quarter in an exclusive partnership with OpenX, and will likely roll out to more European markets later.

Damon Reeve, chief executive of digital-ad network Unanimis, which Orange bought last year, said: "While the technology is global, you can't take a one-size-fits-all approach. You need an understanding of how to create value locally."

The Internet was the only medium to attract an increase in ad spend last year, as advertisers under pressure from the recession liked the clear and rapid returns of paid-for search advertising that could lead to transactions from a single click.

Display advertising, usually used for longer-term brand building, took a back seat, with print, TV and outdoor advertising all suffering as a result, and online display advertising growing only slightly.

The Internet has yet to prove itself as an effective medium for brand building, a state of affairs many see as a challenge. AOL, newly separated from Time Warner, is betting its future on premium online display advertising.

Orange expects the total Western European online advertising market to grow to $15 billion next year from about $13 billion in 2008. Within that, OpenX expects ads sold via exchanges in Europe to be worth up to $1 billion in a couple of years' time.

"As the economy comes back, people will look at re-establishing brands or establishing new brands," OpenX CEO Tim Cadogan, a former senior executive at Yahoo, told Reuters.

Start-up OpenX, based in Los Angeles and backed by Accel Partners and Index Ventures, aims to boost the display-ad market by facilitating the buying and selling of ad space in real time, especially for smaller Web publishers.

OpenX is the world's leading independent ad exchange, and serves more than 300 billion ads every month, putting it in the league of major players including Google's DoubleClick. The vast majority of its current business is in the United States.

OpenX allows publishers to set a floor price, and takes commission when the publisher achieves a higher bid.