There was a big shakeup in the online advertising world last weekend: Google cut off AppNexus from its ad exchange, forcing the startup to direct its clients to purchase ad inventory directly from Google. The move comes only a few weeks after AppNexus raised a huge $50 million round, which included a big chunk from Microsoft. And the timing couldn’t be worse for AppNexus — because of the huge surge in shopping, last week was among the busiest, if not the busiest, time of the year for these platforms.
AppNexus offers, among other things, a real-time platform for purchasing ad inventory from ad exchanges — the largest of which is Google’s. One industry expert I spoke with guessed that Google’s exchange could account for 50% or more of AppNexus inventory, so this is a very big deal for the company and its clients.
Reached for comment, Google gave us this statement:
To protect users and publishers, the Ad Exchange has extensive, widely-published policies for a range of issues including ad quality, ad content and malware. We have technologies to detect violations, and when a customer is in breach of our policies, we take action, including potential suspension from the Ad Exchange.
Google declined to discuss any further details, but the statement suggests that AppNexus has somehow violated its terms. We’ve reached out to the startup to see if it has anything it can share about the issue.
Faced with no other choice, AppNexus has directed its clients to purchase inventory directly from Google’s exchange. AppNexus can still make money off of these transactions though fees, but it can take weeks for these clients to establish a relationship directly with Google. And Google offers its own competing platform through its acquisition of Invite Media earlier this year — if clients begin working with Google directly they may also switch to its demand side platform as well.
Here are two emails that AppNexus sent to its clients, which seem to indicate that it had no idea this was coming.
Dear Client,
Beginning at 7:00 PM ET / 12:00 AM UTC, our monitoring alerted us to the fact that our real time bid requests from Google’s AdX had dropped to zero. We are investigating on our side and are also working with our contacts at Google. Currently we have no ETA for a resolution. We will update you as more details become available.
Thank you for your patience,
Steve
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Important Update:
Further to the notification below regarding the disruption of access to DoubleClick Ad Exchange supply, AppNexus has been in continuous contact with Google to resolve this issue. At present, Google’s position is to require all AppNexus buyers accessing Ad Exchange inventory to have a direct contract with Google in order to restore access. To be clear, this will not impact your ability to use AppNexus as your RTB platform for buying Google inventory, but simply means that you will in the future remit payment for media purchased on DoubleClick Ad Exchange to Google directly, rather than to AppNexus.
Your account manager will contact you tomorrow with details on how to proceed with restoring access to DoubleClick Ad Exchange.
We thank you for your continued patience and support as we work through this.
Regards,
Michael Rubenstein