Ad Optimizer Yieldex Raises $10 Million From Hearst, Amazon

Yieldex, which offers services designed to protect publishers’ pricing from the the downward pressure often brought by ad exchanges and ad networks, has raised $10 million in a third round funding. The round was led by Triangle Peak Partners and Hearst Interactive Media, along with previous investor Amazon (NSDQ: AMZN), which is looking to become a bigger player in the display ad space.

To date, the New York company has raised roughly $22 million, including this latest round.

Yieldex CEO Andy Nibley, in a statement, said that the proceeds from the third round will be used to develop new and existing products, build out its sales force.

While there are dozens of demand-side platforms which help give media buyers an edge when it comes to real-time bidding, there are only a handful of prominent companies on the supply side. The leading companies — The Rubicon Project, PubMatic and AdMeld, which is in the process of being purchased by Google (NSDQ: GOOG) for $400 million — began as “ad optimizers,” which offered to protect the yields on publishers revenues.

Now, these companies are considered supply side platforms, but are also seen as evolving beyond that as they create private marketplaces and essentially morph into exchange operators themselves.

The idea is that if publishers have more control over the exchange process, they’ll be naturally more willing to place their premium inventory on those bidding platforms.

The fear for publishers is that if they do, it will drive the value of their direct sales down — after all, why should a buyer spend all the time haggling over the price of a home page ad when they can just bid on it, and likely get a much lower price, in an exchange environment? As advertisers and agencies funnel more dollars through exchanges, publishers are feeling compelled to put more of their ad space into exchanges, but they’re still fiercely guarding their premium inventory.

As such, companies that cater to publishers and can promise a higher degree of price protection, are starting to attract more interest, where as previously, most of the growing businesses in the exchange arena tended to be DSPs, like Google’s Invite Media, and data management platforms like BlueKai and eXelate. And as Google prepares to own AdMeld, major publishers will be taking a closer look at the landscape and will look to the providers who can tilt things back in their favor.