2013 started out on a high note for OpenX, with the close of a Series E round of funding that brought total funding to over $70M dollars. OpenX was profitable and growing fast, yet in the beginning of the year, we were at a crossroads that would fundamentally change the company going forward.
When taking a close look at the publishers on the OpenX Exchange, it was clear that there were varying levels of quality inventory available, and in the eyes of the newly established marketplace quality team, the barrier to entry for the exchange wasn’t quite high enough.
Under the leadership of John Murphy, the growing marketplace quality team began analyzing traffic quality on a daily basis, and felt the need to make a big change. The recommendation was strong: OpenX should proactively remove low-quality partners and inventory even at the cost of revenue.
For a growing company, sacrificing revenue is never easy, but the decision to disconnect from the aforementioned partners was strategic. While there would be short-term pain, and an uncomfortable conversation with the board, this action would send a strong message about OpenX’s priorities.
Needless to say, impact was significant. The cuts to traffic meant a loss of over $8M in net revenue, and the business went from being profitable to being unprofitable almost overnight.
What the move did, however, was set the company on a course where quality was at the forefront, engrained deeply in our business and culture. Coming from the world of paid search, Tim, Jason and other executives knew that with any rapidly growing industry, there would be a wave of consolidation around the companies that could provide quality and value to partners. Every decision made in 2013 was a major step towards OpenX becoming the highest quality and most trustworthy programmatic marketplace in the industry today.
Throughout 2013 the company aggressively recruited more publishers for its SSP product, Demand Fusion, and many of those publishers agreed to become “co-innovation” partners for the alpha version of what would eventually become the OpenX Bidder product. Early results were spectacular, and the company invested more resources in productizing OpenX Bidder, which would end up transforming the company in 2014 and beyond.
2013 started out on a high note for OpenX, with the close of a Series E round of funding that brought total funding to over $70M dollars.