Google’s plans for display market dominance
Andy Cocker, co-founder and managing partner of Infectious Media: data driven exchange trading specialists, questions Google’s latest strategy to control more of the DSP (demand-side platform) trading interface market…
There’s been no shortage of informed comment and speculation recently about what Google are planning to do with their latest acquisition – Invite Media.
The announcement that Google has confirmed a partnership with Omnicom to build them a global trading desk in return for ‘millions of dollars in display ad spend’ offers more than a few clues as to what Google’s strategy may be.
Let me throw one possible scenario out there – Invite becomes the UI gateway / optimisation engine for Google’s display business. They integrate it with their dynamic creative solution Terracent (another recent acquisition).
They give this away for free to their large advertiser and agency clients (such as Omnicom), under the guise of a supply agnostic platform, and slowly start to integrate and sell access to proprietary data and audience segmentations (Google Analytics, and Search data cover pretty much the whole of the funnel)!
It makes operational and commercial sense that they would…
Adsense and Google owned and operated (e.g YouTube) inventory represents a massive slice of supply in AdX, and generates ‘high margin revenue’ for the Big G. They also make money (less) from every other supply source flowing through the Adx (e.g Doubleclick inventory). Seems quite obvious that Google would offer media buyers a free tool-set to help them buy more from them. The cynical of you out there may take the view that packaging it up and spinning it as a platform/ supply agnostic DSP makes their clients less suspicious of their motives.
Another reason why Google may want more control of the DSP trading interface market is that it will allow Google to take more control of the audience segments (data) that ad buyers build when they trade via a DSP. Presumably someone at Omnicom has thought about this, and has a tight contract with Google around data ownership and usage.
Microsoft (AdECN) and Yahoo! (Right Media) have got some serious catching up to do. At the time of writing, both are still in closed beta trials of their RTB capabilities. What happened last time Google were given the space to develop a lead like this…?
There are many knock on implications of this recent acquisition and potential strategy outlined above. Here are a few of them…
- It commoditizes core DSP technologies and RTB supply integrations.
- It changes the exit scenarios for other DSP’s and will undoubtedly intensify pressure for quicker exits from major DSP investors. Will Microsoft and Yahoo! make similar moves for other DSP’s?
- It changes the focus of the value proposition for other DSP’s and demand side trading organisations away from predominantly tech focused, towards smart data and service layers (on top of good technology and infrastructure).
I may be totally wrong about all of this, and no doubt Google are already thinking 15 steps ahead of anyone else, but it will be interesting to see how things play out in the next 6 months.
Read the Infectious Media blog: infectiousdigital.com/blog