Orange, OpenX team up to establish pan-European ad exchange ecosystem

France Telecom / Orange is partnering with OpenX to launch Orange Ad Market, a brand new online advertising marketplace tailored to the European digital industry.

Orange Ad Market will be operated by Orange and powered by OpenX in exchange for a share on every transaction that is made through the platform. The marketplace will allow all classes of buyers to compete for targeted impressions in real-time auctions and help sellers of online display advertising inventory from all over the globe maximize revenue.

The partnership between Orange and OpenX spans multiple years and is mutually exclusive to all regions Orange operates in.

Here’s how it will work:

On the sell side, publishers make inventory available to Orange Ad Market. They set the minimum price on said inventory, which is basically the minimum they are willing to sell the ad space for, and they get to set filters on ad types and content.

On the purchase side, ad buyers create campaigns targeting the inventory they desire. They can specify a variety of bid rules, including geo-targeting, category targeting, retargeting, brand safe restrictions, frequency capping, and more. They also specify the bid they wish to make for the desired inventory. Buyers can also use real-time bidding technology to bid at the instant the ad request comes into the Ad Market.

As each ad request is made, Orange Ad Market holds an auction in real-time for that particular ad, with the impression going to the winning bidder if – and only if – it beats the minimum price set by the publisher.

Initially, Orange Ad Market will be launched in the United Kingdom and France (expect its debut in the second quarter of 2010), with planned launches in other regions throughout Europe at an undefined later stage.

The partnership is significant because Orange, unbeknownst to some, operates Europe’s largest advertising network: the Orange Ad Network is good for a global reach of approximately 343 million unique users per month, spread across no less than 33 countries. In the pilot countries for Orange Ad Market – the UK and France – alone, the network reaches some 75 million unique users on a monthly basis, according to Vincent Pelillo, Director of Orange Advertising Network.

Basically, this means the France Telecom Group company can build upon a lot of existing relationships with both publishers and advertisers, and make a serious attempt at establishing a genuine pan-European ad exchange ecosystem.

OpenX, which will deliver the technology platform and second-tier support for the venture, will collect a 20% fee on all transactions. OpenX’s CEO, former Yahoo exec Tim Cadogan, tells me this is the standard share it charges for transactions on its own OpenX Market, which he claims reaches more than quarter of a billion unique users per month, as well.

Cadogan added that the company’s is actively looking to strike similar deals with carriers and other potential partners in the Americas and Asia.