AppNexus and Microsoft's eight-year partnership: the story so far

To future-proof itself against adfraud, Microsoft became one of the first premium publishers to test the programmatic waters.

In the eight years since AppNexus and Microsoft formed a partnership, the programmatic landscape has evolved dramatically. Starting from when the industry was in a hypergrowth, considered as advertising’s Wild West, where concerns around low-quality inventory, transparency, and scale were pervasive.

Even though there have been many changes in the industry since then, with AppNexus now acquired by AT&T and being part Xandr, many of those earlier concerns are still relevant.

To future-proof itself against ad fraud, Microsoft became one of the first premium publishers to test the programmatic waters eight years ago, when it committed to stringent quality and brand safety standards, working with AppNexus to apply quality control and transparency policies.

AppNexus also developed an audit process that became the template for how Microsoft evaluated every advertiser on the Microsoft Advertising Exchange (MAX), in order to set high brand safety standards. In 2017, Microsoft became the first publisher to join AppNexus’ transparent auctions initiative, which is a visible communication that tells buyers what kind of auction they are entering as the bid request is sent.

By informing advertisers on whether they are participating in a first- or second-price auction and alerting them to the price floor, this innovation allowed buyers to better understand how their bid prices influenced their win-rate and clearing price.

After AppNexus enforced ads.txt and made a commitment to proactively audits its partners to ensure that it works with clients who share its commitment to quality standards, Microsoft was also quick to implement ads.txt on MSN and part of Windows and is in the process of rolling it out globally.

Today, Microsoft delivers more than 700 billion impressions annually in the AppNexus ecosystem, across display, video, and mobile channels. By focusing on the user experience and setting up their pages to render ads in-view, Microsoft’s publisher brands has a viewable inventory rate of over 85% according to AppNexus’ viewability analysis, which is well above the industry average.

Tae Kyu Kim, the senior regional director at AppNexus, tells The Drum as programmatic continues to become a standard way of media buying, the industry has finally caught up to the vision that Microsoft and AppNexus outlined from the start, which is quality at scale no matter what method you use to buy media.

“From a technology perspective, Microsoft and AppNexus partnered early on to improve viewability and increase quality and transparency. Over the last year or so, we have really seen our vision be validated and affirmed by a demand for these qualities and capabilities across the buying landscape,” he explains.

“From an integration perspective, the complexity of the ecosystem means a lot of development work to ensure integration. The key is identifying opportunities and integrations that optimize and bring efficiency to your programmatic strategy, rather than complicate it.”

Giving an example of how MAX has worked with clients over the years, Tae shares how an airline that wanted to generate click-through rates (CTR) to their website in Taiwan and chose to run an MSN Home Page Takeover (HPTO). The result was a 0.42% CTR.

For another advertiser that wanted full control of guaranteed impressions, even delivery, time targeting, MAX proposed a large format priority deal (PMP) on MSN. “The buyer experienced a significant average CTR of 0.98% with their deal for a custom header, which resulted in them increasing their budget to the campaign,” says Tae.

Increasingly, supply chain inefficiencies have become a big topic for brands who are concern about the money they are spending and wasting. Tae acknowledges this an unfortunate by-product of programmatic’s rising popularity is that it has made the entire ecosystem more complex.

He points out that removing supply chain inefficiencies is why Microsoft chose AppNexus as its exclusive SSP and why Microsoft is supportive of initiatives that built trust with buyers by giving them visibility into their spend on the AppNexus platform.

“It’s early days, but I’m pleased to say that as of September 2018, Microsoft finalized testing around transparent technology fees,” explains Tae. “All Microsoft app and display publishers transparently will expose technology fees to buyers that are using transparency partners (like Amino Payments) to track payments through the supply chain.”

Together with Microsoft, the road ahead for AppNexus will be driving the understanding of the critical importance of transparency, openness, and quality to the programmatic industry. While it continues to innovate its technology through new formats and offerings, it wants to simultaneously partner with Microsoft on initiatives that build trust in the marketplace and supply chain.

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