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DSPs Reap Rewards As Google and Facebook Brawl Over FBX

Social Network's Decision to Bar Search Giant From Ad Exchange Has Let Small Players Boost Revenue, Expand Client Relationships

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When it launched its ad exchange, FBX, last summer, Facebook welcomed a crowd of ad-tech companies to its real-time bidding party. But Google -- the largest ad-tech player of them all -- didn't get an invite.

That snub has been a boon for many so-called demand-side platforms like Turn, MediaMath, AdRoll, DataXuand others that have picked up the business.

Turn, for one, isn't shy about saying so. "Did we get new clients from Google because of this? Yeah, absolutely," said Maureen Little, Turn's senior VP-business development.

Google powers a big chunk of the world's online advertising through DoubleClick and other technologies, including the former Invite Media. But being barred from FBX cuts it off from serving ads on the world's biggest social network, which boasts 1.1 billion users.

Boost of fortunes
Facebook declined to comment, but its motivations are obvious. Allowing Google on FBX would give a rival access to a huge trove of data. "It would pretty much drop [Facebook's] pants," said Karsten Weide, VP-digital media and entertainment at research firm IDC. "You would see all of their inventory. You would see all the data that comes with it. Otherwise, it doesn't make sense to trade this stuff using real-time bidding," he said. "Facebook would not like Google to see all that."

Google's VP of ad products, Neal Mohan, has repeatedly said he'd like to see the impasse resolved, but both sides privately say a deal is unlikely.

"Facebook is not going to do anything that is going to make Google's life any easier," Mr. Weide said.

That means DSPs can continue to feed at the FBX trough without worrying about Google forcing them out for what essentially amounts to scraps for the search giant, which posted net income of $3.2 billion in the second quarter alone.

"All these guys have $150 million a year in revenue, so this business is very interesting to them," said Mr. Weide. "It could make quite a bit of a difference for them. It's definitely boosting their fortunes."

Maureen Little
Maureen Little

Last week, AdRoll announced it hit a run rate of $100 million, citing FBX as an important driver. "The impasse between Facebook and Google has allowed us to be Switzerland in the middle and focus on delivering results for our customers across both inventory sources as well as many others," said AdRoll President Adam Berke in an email.

Kurt Unkel, president of Publicis' VivaKi, said DSPs like Turn and MediaMath have captured increased amounts of the roughly $125 million VivaKi spends on social advertising.

"From our relationship with our DSP partners, it would be hard to deny that it has actually helped," he said. The DSPs have "made some great inroads on accounts maybe they wouldn't have had otherwise."

International expansion
Ms. Little said having access to FBX is helping Turn primarily by expanding its relationships with existing customers. Many of its clients, like VivaKi, use both Turn and Google, so what otherwise might have been a decision between the two became far less complicated.

FBX has helped Turn expand internationally. The company is now running FBX campaigns in more than 50 countries, Ms. Little said, and FBX has helped it get off the ground in places it might otherwise have been shut out of due to lack of inventory.

"Across Europe, we're definitely using Turn a lot more because of FBX," said Mr. Unkel.

Even if hell froze over and Facebook and Google struck a deal tomorrow, it might not hurt the indie DSPs, which have had more than a year to prove themselves outside Google's shadow.

"I don't see us necessarily scaling our relationship with some of our alternative platforms back in any way, even once it gets resolved," said Mr. Unkel. "We've been basically learning and using their platforms in parallel to this situation for quite some time, and there are some things about those platforms that we actually enjoy, like and leverage more than we find in, say, DoubleClick Bid Manager."

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