New York ad tech company AppNexus wants to take out Google – and stop Amazon in its tracks

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The ad tech company AppNexus says that advertisers are looking for an alternative to working solely with tech giants like Google and Amazon.
The company is set to roll out new ad buying software that employs machine learning, which CEO Brian O'Kelley says will help it blow past competitors.
But AppNexus faces powerfully entrenched foes, and skeptical ad buyers.

The advertising-technology industry has gone through an upheaval of late, and many upstarts have conceded the field to giants like Google, Facebook and increasingly – Amazon.

But New York-based AppNexus believes it still has a shot to take down the titans, and emerge as powerful, neutral alternative to the dreaded digital duopoly, as well as Amazon's looming specter. Getting it there, AppNexus thinks, will be new ad-buying software that promises to bring more automation and data science to the process. It's something that others say is easier said than done, but AppNexus CEO Brian O'Kelley has his pitch down pat.

"[The industry's] biggest concerns are Amazon and Google," O'Kelley told Business Insider. Amazon is threatening because they can push into ad-tech and not worry about making a profit, O'Kelley said. Yet advertising isn't Amazon's core business, he contends. Google meanwhile, is focused on on digital ads, but its development has been slow, said O'Kelley.

"Our new product is a full generation ahead," he says.

Ok, so what's so great about revamped ad buying software? O'Kelley says its' new DSP –"AppNexus Programmable Platform"– doesn't just make it easier to buy lots of digital ads on lots of websites, but also takes away a lot of the manual bidding that ad buyers need to do when executing programmatic buys. The software automates that process and does it smarter and faster than humans, he said.

Sara Robertson, vice president of product engineering at Xaxis, a programmatic ad buying division within the ad giant WPP (which has invested in AppNexus) has been an early test partner of the new tools. She said for smaller advertisers, it may not make that big of a difference.

But for big marketers that spend lots tens of millions of dollars on programmatic ads, and employ sophisticated measures of success, it could be a game changer. "This will make sure you bid the right price at the right time on an ad," she said. When it comes to that sort of 'machine learning' for programmatic ads, "Google and others are not even close."

Ok, but it is easy to boast that improved features will shake up the digital advertising hierarchy, but "it's hard for any one tool or bidding feature to move the needle," said John Malysiak, general manager of search, social and programmatic at the ad buying agency OMD.

"In this space, it's about unique data or unique access to inventory," he said, and Google and Amazon are not going to stand pat.

Mac Delaney, SVP, Media Investment and Strategy at the data-centric ad agency Merkle said the AppNexus is also facing pressure from enterprise software monsters like Adobe, who are offering marketers one-stop shopping. Besides helping them buy and sell ads, they promise to help them store and crunch data, for example.

"That's where the industry is headed," he said.

If nothing else, it's an industry in flux. That's probably why AppNexus (which had reportedly been planning an IPO for early this year, until the tech IPO market got dicey) sees an opportunity to get on the potential short list of winners.

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