OpenWeb eyes growth amid structural and economical turmoil
For better or worse, ad tech vendor OpenWeb is attracting a lot of attention.
That’s what happens when an unprofitable business is given $170 million to help ad-funded publishers (and advertisers) at a time when those same businesses are being battered by economical and structural headwinds.
To be fair, OpenWeb’s premise sounds intriguing enough: help publishers become platforms for healthy conversation and free speech while helping those same businesses acquire first-party data in the process.
But the jury is still out on the way it’s going about it: so far, Open Web is essentially a commenting plug-in that’s using data to fuel an ad network.
Sure, there are nuances to the business now that it has expanded its services into data management, live-blogging and polling. But for all intents and purposes, it’s a business where its potential — and more importantly the narrative around it — is what has stoked investors despite advertising being mired in structural and economic turmoil.
Confused? OpenWeb’s CMO Tiffany Xingyu Wang gets it.
The deal looks contrarian, she admitted — and not just due to the timing.
Over the last year or so, OpenWeb’s raison d’etre has been called into question. The business that says it’s helping to quash online toxicity, was inadvertently fuelling it. It’s all here in an investigation from Gizmodo and the self-proclaimed ad tech watchdog Check My Ads.
Changes duly followed and OpenWeb swiftly got rid of several publishers two weeks after the investigation. Bullet dodged. Let the good times roll.
Not quite. Bad news tends to stick in an ad tech industry known for being “murky at best, fraudulent at worst”. So Xingyu Wang is pragmatic about the future. Yes, a big cash windfall in a volatile economy suggests the company is on to a winner. But the fact that OpenWeb has even had to secure those additional funds so soon after its last cash injection last November says everything about the costs that come with standing up an ad tech business in the current climate.
Take onboarding, for instance. New publishers that want to work with OpenWeb go through a process of artificial intelligence and human-based checks to ensure they’re not affiliated in any way with disinformation or hate speech. It’s not cheap to keep these checks and balances in lock step with the rest of the market.
Then again, the rewards could be worth it all given where the market could be headed.
“The funding round, which was oversubscribed, was a big confidence boost for what we’re building here at OpenWeb,” said Xingyu Wang. “It was another signal that the commoditized part of ad tech, where safety and data privacy can be an afterthought, is going through a paradigm shift.”
It’s a shift to a world of limited third-party addressability, where the market is bifurcated on clear quality lines: on one side there’s premium ad inventory traded on the back of first-party data and consent: the other side is riddled with poorly targeted impressions far more susceptible to fraud, and which a significant portion of the independent ad tech market seem destined to be reliant on.
No surprises for guessing what side of the market OpenWeb wants to exist in.
To stick the landing, it’s trying to pull on multiple levers, from first-party data capture to engagement, validation and verification to monetizing readers. Sound familiar? It sounds a lot like a data management platform. Xingyu Wang prefers “community engagement platform.”
Either way, OpenWeb is building toward something many of those businesses are also working toward: transitioning the open web to new solutions that could level the playing field with the walled gardens.
In the short-term, this means focusing on safety, particularly when it comes to giving publishers better tools needed to moderate the line between free speech and hate speech happening in the comment sections of their sites. Having the tech is just part of the challenge, said Xingyu Wang. Data needs to evolve because the definition of hate speech is a constant state of flux. Part of this process involves building what Xingyu Wang called a “trust taskforce” within OpenWeb.
“The taskforce will be led by me and include colleagues from legal, policy, product and the commercial sides of the business,” she continued, “The aim is to make sure that we’re able to produce the best content moderation policies that are informed not just by our commercial stakeholders but also our partners who represent societal perspectives on these issues, whether that’s from Newsguard, The Global Disinformation Index or even World Economic Forum, where i’ve sat on the Digital Safety Coalition for many years.”
Adyoulike, the French ad tech vendor, acquired earlier this year, to unearth ad targeting opportunities around the comment sections will be expanded globally in tandem with the evolution of OpenWeb’s content moderation prowess. That sort of runway can only last so long, especially given Adyoulike already has a presence across EMEA.
So don’t be surprised if OpenWeb buys a business that complements Adyoulike’s targeting tools like segmentation or some sort of cohort modeling platform as it looks to wring more money from its existing markets. Chances are it won’t be long before those plans are firmed up. As Xingyu Wang explained: “We want to spend money on organic growth but there will also be inorganic growth. We’re thinking through that.”
Aggressive as these plans are, the barriers around the sort of model OpenWeb is trying to erect aren’t necessarily high. The more progressive publishers like Bloomberg Media and News U.K. are already spinning up their own versions of OpenWeb — at least in its current guise. Maybe there’s an opportunity for one company like OpenWeb to power the market when it comes to audience recirculation platforms. It could also just as easily become a long-tail solution plugged into lots of WordPress blogs.
“There’s a lot of momentum (and for good reason) around the two core tenants of the OpenWeb business pitch: the first is first-party data, which is a lot more valuable now thanks to regulation and policy changes from Google and Apple,” said Kevin Flood, a partner at investment firm First Party Capital. “The second is free speech and how to enable that in a healthy environment with some sort of verification. The key for OpenWeb will be how successfully they’re able to help publishers monetize the first-party data being generated by the conversations happening on their pages.”
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