• by Laurie Sullivan  @lauriesullivan, March 31, 2010

The Orange Ad Market will initially roll out in the United Kingdom between April and June, followed by France and other countries where the telecom carrier operates. Orange, which runs Europe's largest advertising network, will tap into established relationships with both publishers and advertisers. The Orange-branded platform will support clients through marketing, sales and services through a new division run by Vincent Pelillo, director of Orange Advertising Network, Orange.

Pelillo views the exclusive multiyear and multi-country partnership as the next move, the next "big opportunity" into services and support through technology, tools and platforms. "I see the next move as being based on automation and ways to simplify the ad market," he says. "It would have been easier for us to do this by ourselves, with more than 200,000 employees worldwide, but we chose to create the exchange with a partner."

The ad exchange partnership between Orange and OpenX provides prospects for growth and competition to the likes of Google's DoubleClick and Yahoo Right Media.

OpenX's technology will power the Orange ad exchange built on OpenX Market technology. Every ad impression gets auctioned in real-time at once worldwide. More than 300 billion ads run through the open-source software monthly on the more than 150,000 Web sites across the Internet that use OpenX Ad Server.

Orange -- the No. 3 mobile operator in Europe, with consolidated sales of 50.9 billion euro (compared with Google's approximate $23.7 billion) in 2009 -- supports about 183 million customers in 32 countries of which 131 million pay monthly for mobile, broadband and IPTV. The service reaches 55% of all European Internet users, and 343 million monthly unique users globally, which includes the Orange Ad Network in the Americas, operated by subsidiary starMedia, according to comScore.

The ad exchange model is not without challenges. Publishers find supply fragmented, and too many manual processes require marketers to FAX and email tags and reports. In an industry riddled with stumbling blocks, there is plenty of opportunity for growth. Tim Cadogan, chief executive officer at OpenX, estimates the European display market at about $7 billion for 2010, but only about 3% go through ad exchange platforms.

"A French publisher will have an option to put in ad inventory and buyers from the United States, England, Japan or France can bid for that," Cadogan says. "By making sure that market remains open and global, you maximize competition, which maximizes the yield for the publisher."

The Western European online advertising market -- worth an estimated $13 billion in 2008 -- should reach $15 billion by 2011, according to comScore.

The Orange Ad Market offers a new approach to online advertising marketplaces by allowing major companies in key regions to participate directly in building exchange value chains, creating the first European exchange ecosystem. For publishers it minimizes risk, but has the potential to gain higher yields.

Putting the inventory into the Orange Ad Market allows publishers to create an impression by impression auction to find buyers who may want to pay more than the original minimum specified bid.

Pelillo and Cadogan insist the Orange Ad Market represents the first marketplace to launch by a top European advertising and telecommunications company, creating the first European exchange network. Open to all buyers and sellers of online display advertising, the ad exchange aims to help publishers maximize revenue, and advertisers engage target audiences across multiple Web sites.

The Orange Ad Market allows publishers to set the floor or reserve price for each impression, ensuring price protection. The platform also gives publishers global access to inventory, along with control of the price and the ads that are displayed.

Advertisers and agencies can increase performance by reaching their target audience in higher numbers. The simplified interface provides efficiency and the ability to buy ad inventory based on unique criteria across a combination of large niche publishers and a large pool of targets.