• by Mark Walsh  @markfwal, February 26, 2014

Ad exchange OpenX on Wednesday continued its mobile expansion, launching of a private exchange geared specifically to native mobile ads. The real-time bidding (RTB) exchange will allow developers and publishers to sell in-stream mobile ad units in applications to a select set of pre-screened buyers.
 
Initial publishers on board include IconApps and Tagged, while buy-side partners include RUN and mediasmart. Mobile rich media ad company Celtra is also involved as the preferred provider of native ad solutions through its AdCreator platform.
 
While native ads still make up only a small portion of mobile display, OpenX is counting on growing demand for the format to fuel the new marketplace dubbed O/X Native and announced today at the Mobile World Congress in Barcelona.
 
The 320 x 50 banner, “accidental” click banners, if you will, have a limited shelf life for publishers. They’re looking to do a more integrated experience with their apps,” said Robert Kramer, general manager, mobile at OpenX. “So what we’re providing them is the ability to do that programmatically.”
 
The move comes on the heels of OpenX striking a partnership with Airpush earlier this month to launch a private mobile ad exchange called AirX. It will combine OpenX’s RTB exchange with Airpush’s ad network of over 120,000 Android apps.
 
Kramer explained that AirX draws only Airpush supply with a combination of OpenX and Airpush demand sources, while O/X Native will include only OpenX inventory and demand. “We’re taking our own publishers and demand partners and building a cornerstone for what we believe to be one of the most scalable native ad exchanges,” he said.
 
RUN and mediasmart are among the first of what OpenX says will be a group of 300 demand-side platforms, agency trading desks and other buyers in the mobile native exchange representing premium advertisers. Publishers would have the ability to approve any buyers and filter and review specific ads.
 
Because the form native ads take can vary with each developer, they’d be able to work with Celtra to create customized units suited to a particular app. Noting that most native ads haven’t been sold on a real-time basis to date, Kramer acknowledged: “It’s a harder thing to actually do at scale.” But that hasn’t stopped a growing number of exchanges, vendors and agencies from trying to marry the two hot trends of native and programmatic.
 
Celtra says its native formats are the best performers of all its rich ad units, with an expansion rate of 1.8% and an engagement rate of 18% in the fourth quarter of 2013. And ads combining native and video elements had a 63% video completion rate.
 
The Interactive Advertising Bureau in December released a playbook for native advertising covering both desktop and mobile that highlighted six basic types of native formats: in-feed units, paid search, promoted listings, recommendation widgets, standard IAB ads with native units and custom.
 
But Joe Laszlo, senior director of the IAB’s Mobile Marketing Center of Excellence, admitted the organization hasn’t looked closely at in-app native ads. “It is possible that they open up opportunities for rare 'exotic species' of native ad beyond those six types,” he said.
 
For buyers, the Native O/X exchange is promising hiqh quality in-app inventory, including some that hasn’t previously been available programmatically or in mobile. It also offers a range of targeting by location (GPS-based data) and demographic and contextual factors.

Mobile overall now accounts for about 15% of total traffic on the OpenX exchange, with that proportion expected to ramp up in the next couple of years.