openx white paper total cost of ownership

8/3/2019 OpenX White Paper Total Cost of Ownership

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Total cost of ownership:

How much are you really spending to

host your ad server?

An OpenX whitepaper

November 2010

In today’s economic climate more and more companies are taking a close look

at the true costs of their various IT functions, including ad serving costs.

This whitepaper looks at what is required to self-host an ad server such as

OpenX Source or DART Enterprise, and calculates the true cost of self-hosting,

factoring in hardware, software and personnel costs. It then benchmarks this

total cost of ownership (TCO) against the cost of using a fully hosted solution

such as OpenX Enterprise.

http://www.openx.org/



OpenX


How much are you really spending to host your ad server?

2

© 2010 OpenX www.openx.org

Table of Contents

1 Introduction .................................................................................................................................... 3

2 Anatomy of a self-hosted ad server ................................................................................................ 4

2.1 Overview ................................................................................................................................. 4

2.2 Software .................................................................................................................................. 4

2.3 Servers..................................................................................................................................... 4

2.4 Staff ......................................................................................................................................... 4

2.5 Putting it all together (a.k.a. technical architecture) .............................................................. 5

3 Total cost of ownership .................................................................................................................. 6

3.1 The OpenX Enterprise benchmark .......................................................................................... 6

3.2 Small, regional publisher using OpenX Source ....................................................................... 6

3.3 Medium sized, regional publisher using DART Enterprise ...................................................... 8

3.4 Large, multi-regional publisher using DART Enterprise .......................................................... 9

4 Conclusion ..................................................................................................................................... 11



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1 Introduction

Historically many publishers hosted their own ad server, primarily because of the lack of a hosted,

configurable alternative within their budget. Today, cost-effective and customizable hosted

alternatives such as OpenX Enterprise do exist, and those same publishers are increasingly switching

to these platforms – part of the wider trend towards using cloud-based software-as-a-service such as

Salesforce and Google Analytics.

However, to a publisher who has steadily increased their investment in a self-hosted ad server over

time as their business – and ad impressions – grew, the true cost of running their own ad server may

not be fully apparent. Equally, to a new publisher looking to select their first ad server, it may not be

clear how the total cost of ownership (TCO) for a self-hosted solution compares to the hosted

alternative, and indeed how the costs would scale over time as their impression volume grows.

This whitepaper will help publishers to evaluate the TCO of a self-hosted ad server compared to the

hosted alternative. First we look at what is needed to self-host an ad server such as OpenX Source or

DART Enterprise, factoring in the hardware, software and personnel requirements. We then employ

a straightforward pricing model to calculate how the TCO for this self-hosted solution scales with

impression volumes. Lastly we benchmark this TCO against the cost of using a fully hosted solution

such as OpenX Enterprise, before setting out some final recommendations for publishers looking to

perform this exercise themselves.

To make this whitepaper as useful to as many different types of publisher as possible, we provide

three distinct TCO comparisons, each with a comprehensive range of relevant ad impressionvolumes:

Publisher Self-hosted ad server vs. Hosted ad server Impression range

Small, regional OpenX Source OpenX Enterprise 50m-500m

Medium, regional DART Enterprise OpenX Enterprise 200m-1bn

Large, multi-regional DART Enterprise OpenX Enterprise 500m-5bn



OpenX



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2 Anatomy of a self-hosted ad server

2.1 Overview

A publisher looking to self-host their own ad server needs to consider three key building blocks:

1. Software to manage and deliver the ads

2. Servers to host the ad server and deliver rich media

3. Staff to support the ad server

We look at each of these in turn in the following sub-sections.

2.2 SoftwareOf course, the key component in a self-hosted ad server is the software itself. There are only a few

commercial-strength ad servers available for installation, on account of the limited value to most

businesses of hosting their own ad server. These products include OpenX Source and DART

Enterprise, which will be the focus of the self-hosting comparisons in this whitepaper.

2.3 Servers

The ad server software will need one or more servers to run on. For the volumes under

consideration in this whitepaper, there are three potential types of server which a publisher could

use:

1. Dedicated physical servers, either rented or owned by the publisher

2. Cloud hosting, such as Amazon EC2 or Rackspace Cloud

3. Virtual private servers, such as those provided by Slicehost or Linode

Note that for performance reasons the ad servers will rarely deliver the rich media ads (video,

interactive etc) themselves – instead these will typically be served from a content delivery network

(CDN) such as Akamai or Amazon CloudFront.

For the purposes of this whitepaper we will focus on a self-hosted ad server running on dedicated

physical servers, and integrated with a rich media CDN. Typically using cloud hosting or virtual

private servers will be slightly cheaper than dedicated physical servers at lower impression volumes,

but more expensive at higher volumes.

2.4 Staff

Naturally self-hosting any software has some cost in personnel terms. With ad serving there are

actually two key roles to fill:

1. Systems administration, including setting up the ad server software, maintaining it (e.g.applying all-important security fixes, clearing old logs) and maintaining the servers it runs on



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2. Technical user support, providing technical support to the ad trafficking/ad ops team (e.g.

responding to questions such as “why isn’t my campaign delivering?”)

How much time these two roles require will depend on a few factors, including the volume of ads

being delivered, the number of ad traffickers to support and the complexity of the site’s ad

trafficking and targeting setup. Potentially a smaller publisher will have one technical resource

juggling both of these roles and also working on other, non-advertising-related tasks.

In our model we vary the amount of time a technician spends on these tasks depending on the total

volume of ad impressions.

2.5 Putting it all together (a.k.a. technical architecture)

The exact number and setup of the servers and software will depend on a number of different

factors, most importantly:

The volume of ad impressions to be served, including the peak volumes

The geographical distribution of the site’s visitors, in particular if they are all in one region,

or spread across the world

For the purposes of this whitepaper, we model two key different technical architectures for self-

hosting, based on the size and scope of the publisher:

1. A simple, non-load balanced architecture for a small-to-medium, regional publisher. This

assumes multiple ad servers and database servers residing in a single data center

2. A more complex, globally load balanced architecture for a large, multi-regional publisher.

This assumes the servers will reside in four data centers across the world (typically US West

Coast, US East Cost, Europe, Asia), with global load balancing to distribute traffic to the

nearest data center



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3 Total cost of ownership

3.1 The OpenX Enterprise benchmark

For each of our total cost of ownership comparisons we will use OpenX Enterprise as the benchmark.

The pricing model for OpenX Enterprise is a combination of a fixed monthly fee to make a specific

volume of requests for impressions, plus an 'overage' fee for any additional ads served, charged on a

CPM basis.

As OpenX Enterprise includes all hosting, bandwidth, security and support costs, benchmarking the

OpenX Enterprise TCO is straightforward. For simplicity we treat total requests for impressions as

equalling total impressions (i.e. all requests are successfully delivered as impressions), to give costs

scaling with impression volumes as follows:

Monthly cost ($)

3.2 Small, regional publisher using OpenX Source

Our first TCO comparison is between a self-hosted, non-globally load balanced OpenX Source ad

server and OpenX Enterprise, for 50m to 500m impressions. This assumes that all servers are in a

single data center – a typical self-hosting setup for a small, regional publisher although not a robust

one, as there is no redundancy or failover should there be problems with that one data center.

We have already seen how the cost of OpenX Enterprise scales with impression volumes; for the cost

of self-hosting OpenX Source, we need to include the following inputs:

Software OpenX Source is free open source software, so no softwarecost is included here

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

25 50 75 100 125 150 200 250 300 400 500 750 1000

OpenX Enterprise

Impressions (m)



OpenX



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Servers To calculate the number of servers required, we assume

25m impressions per month per server – this factors in the

need for database servers as well as ad servers

To calculate the monthly cost per server we used a Dell Xeon

5520 (16 GB RAM, 8 cores, 2 disks) as our reference server,

took the typical cost of this server in the US (Europe and

Asia would be 20% more expensive), and then spread these

costs out over 3 years to get a monthly cost of $300 per

server. This is higher than in the following two scenarios

below because at these volumes the back-end servers will

never be fully utilized

For the rich media ad serving, we assume 25% of the

impressions are rich media with an average size of 200KB,

and estimate that the CDN charges $0.04 per gigabyte

delivered

Staff We assume one technician on a salary of $87,000 is

responsible for all OpenX Source maintenance and technical

support. We vary their 'utilization' (how much of their time

they spend on the ad server) from 50% at 50m to 60% at

500m

Putting these numbers together, we calculate the following TCO for a small, regional publisher using

self-hosted OpenX Source compared to his or her equivalent using OpenX Enterprise:

Monthly cost ($)

As we can see, the monthly cost of self-hosting OpenX Source scales linearly with volumes, and is

255%-41% more expensive for equivalent volumes than OpenX Enterprise.

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

50 100 150 200 250 300 350 400 450 500

OpenX Source

OpenX Enterprise

Impressions (m)



OpenX



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3.3 Medium sized, regional publisher using DART Enterprise

Here we compare a self-hosted, non-globally load balanced DART Enterprise ad server and OpenX

Enterprise, for 200m to 1bn impressions. Again we assume that all servers are in a single data center

– a typical self-hosting setup but not one to recommend as there is no redundancy or failover should

there be problems with that one data center.

For this comparison we look at DART Enterprise rather than OpenX Source because above 500m

impressions the single server-homed ad scheduling system and state database of OpenX Source

begin to show scaling problems which are not seen at lower levels. These issues do not exist with

OpenX Enterprise due to the distributed technology stack operated by OpenX.

For the cost of self-hosting DART Enterprise, we need to include the following inputs:

Software DART Enterprise is commercial software which costs $250,000. Spreading

this cost over three years gives us a monthly cost of $6,900

Servers To calculate the number of servers required, we assume 25m impressions

per month per server – this factors in the need for database servers as

well as ad servers

To calculate the monthly cost per server we used a Dell Xeon 5520 (16 GB

RAM, 8 cores, 2 disks) as our reference server, took the typical cost of

this server in the US (Europe and Asia would be 20% more expensive),

and then spread these costs out over 3 years to get a monthly cost of

$230 per server

For the rich media ad serving, we assume 25% of the impressions are rich

media with an average size of 200KB, and estimate that the CDN charges$0.04 per gigabyte delivered

Staff We assume one systems administrator on a salary of $96,000 is

responsible for all DART Enterprise setup and maintenance. We vary their

'utilization' (how much of their time they spend on the ad server) from

25% at 200m to 35% at 1bn

We assume one technical support operative on a salary of $78,000 is

responsible for fielding all queries and issues from ad trafficking/ad ops.

We vary their 'utilization' (how much of their time they spend supporting

the ad server) from 25% at 200m to 35% at 1bn

Putting these numbers together, we calculate the following TCO for a medium sized, regional

publisher using self-hosted DART Enterprise compared to the OpenX Enterprise equivalent:



OpenX



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Monthly cost ($)

As we can see, the monthly cost of self-hosting DART Enterprise in a regional setup scales linearly

with volumes, and is 232%-46% more expensive for equivalent volumes than OpenX Enterprise.

3.4 Large, multi-regional publisher using DART Enterprise

Here we compare a self-hosted, globally load balanced DART Enterprise ad server and OpenX

Enterprise, for 500m to 5bn impressions. For the cost of self-hosting DART Enterprise, we need to

include the following inputs:

Software DART Enterprise is commercial software which costs $250,000. Spreading

this cost over three years gives us a monthly cost of $6,900

Servers To calculate the number of servers required, we assume 25m impressions

per month per server – this factors in the need for database servers as

well as ad servers. Before applying this ratio, we also upweight the

required impressions per month by 40%, to ensure that there is enough

over-capacity to continue ad serving should one of the regional centers

stop functioning

To calculate the monthly cost per server we used a Dell Xeon 5520 (16 GB

RAM, 8 cores, 2 disks) as our reference server, averaged the typical cost

of this server in the US, Europe and Asia (in Europe and Asia the server

will cost 20% more), and then spread these costs out over 3 years to get a

monthly cost of $255 per server

We estimate a monthly cost of $1,200 for the global load balancing

For the rich media ad serving, we assume 25% of the impressions are rich

media with an average size of 200KB, and estimate that the CDN charges

$0.04 per gigabyte delivered

Staff

We assume one systems administrator on a salary of $96,000 is

responsible for all DART Enterprise setup and maintenance. We vary their'utilization' (how much of their time they spend on the ad server) from

$-

$4,000

$8,000

$12,000

$16,000

$20,000

$24,000

200 300 400 500 600 700 800 900 1000

DART Enterprise

OpenX Enterprise

Impressions (m)



OpenX



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30% at 500m to 100% at 5bn

We assume one technical support operative on a salary of $78,000 is

responsible for fielding all queries and issues from ad trafficking/ad ops.

We vary their 'utilization' (how much of their time they spend supporting

the ad server) from 30% at 500m to 100% at 5bn

Putting these numbers together, we calculate the following TCO for a large, multi-regional publisher

using self-hosted DART Enterprise compared to the OpenX Enterprise equivalent:

Monthly cost ($)

As we can see, the monthly cost of self-hosting DART Enterprise in a globally load balanced, multi-

regional setup scales linearly with volumes, and is 165%-37% more expensive for equivalent volumes

than OpenX Enterprise.

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000$90,000

$100,000

$110,000

0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

DART Enterprise

OpenX Enterprise

Impressions (bn)



OpenX



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© 2010 O X

4 Conclusion

As we have seen, the monthly costs of self-hosted ad serving are significantly higher for all three of

our TCO comparisons, with a 'self-hosting premium' of between 255% and 37%:

Publisher Self-hosted ad server vs. Hosted ad server Impression range Self-hosting premium

Small, regional OpenX Source OpenX Enterprise 50m-500m 255%-41%

Medium, regional DART Enterprise OpenX Enterprise 200m-1bn 232%-46%

Large, multi-regional DART Enterprise OpenX Enterprise 500m-5bn 165%-37%

It should also be noted that these comparisons are not strictly like-for-like, as the self-hosted setups

have several limitations which aren't highlighted in a straightforward TCO comparison:

1. Redundancy - in the first two scenarios above, there is no global load balancing and spare

capacity built in, meaning that if there are problems with the servers in the one data center,

all ad serving will go offline, potentially 'breaking' any sites which use those ad tags

2. Security - malware groups see out-of-date, unpatched ad servers as a good way of

distributing malware. Publishers self-hosting their ad server need to be highly vigilant to

ensure their users aren't targeted in this way

3. Functionality - not all of the same plugins (around e.g. forecasting and advanced analytics)

which are present in OpenX Enterprise are available in OpenX Source

Given the cost comparisons, and the qualitative issues shown above, it is OpenX's recommendation

that publishers use a hosted ad server solution, such as OpenX Enterprise. More information about

OpenX Enterprise can be found on the OpenX website here.

http://www.openx.org/publisher/enterprise-ad-server




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