I'm participating as a guest tomorrow in a Yi-Tan call that's focusing on the recent acquisition spree of advertising networks, and as I collected my thoughts together (all both of them) for notes, I wanted to just post my thoughts about the Internet advertising space in general – and Google specifically.
I had predicted that Google needed to get into this game in 2005. But clearly, I was short sighted when I predicted that they would build, rather than buy this technology. Clearly with nine gazillion dollars in the bank, it makes sense for them to buy, rather than build – especially when it comes with a wonderful client list as well.
In short, what was a slowly disappearing line between traditional media and online media has now been completely blurred by Google's giant rubber eraser.
In my mind, the key for Google, as well as the other companies that have acquired similar advertising companies (Microsoft, Yahoo, WPP, AOL) isn't so much the "search marketing" or "contextual advertising" – but rather the access to the more traditional ad management approaches for new types of content distribution.
Cuz even though internet advertising is now everything everybody hoped it would be back when we were all watching talking sock puppets on TV, it's still just a very small piece of the pie. TV advertising is still more than $65 billion. Print is still around $30 billion and radio is barely hanging on at just over $10 billion. So, (if we believe the IAB) internet advertising is only whuppin' radio at this point.
So, now Google starts to get into print and TV advertising – but also is setting itself up to be an advertising network for all these "web 2.0", rich content applications. Just look at the last year of acquisitions for good ol' GOOG:
- April, 2007 – DoubleClick (still pending)
- May, 2007: Panoramio – Web 2.0 mapping photos with Google Earth
- May, 2007 – GreenBorder – browser security
- April 2007 – Tonic Systems content creation tools for presentations and document conversion
- April 2007 – Marratech VideoConferencing
- March 2007 – Adscape Media – Advertising placement in video games
- March 2007 – Trendalyzer – Analytics as easy to use interface
- December 2006 – Enoxon – Internet mapping
- October 2006 – YouTube – Video content
- October 2006 – JotSport – Wikis for web sites
- August 2006 – Neven Vision – Mobile photo searching
So, the trend I see there (other than filling a security hole with GreenBorder and the Video Conferencing tool) is all about services for advertisers, and content inventory.
So, of course Search advertising isn't going anywhere – heck Google invented that (yes for all of you who remember GoTo.com I know that's not really true but they truly made it contextual). And, in fact Search marketing was 40% of all interactive advertising revenue. And Google's experimentation into Pay Per Action is new – but already getting some steam.
But the acquisition of DoubleClick makes double sense (ha ha) because it gives Google the ability to provide new tools to the publishers already using AdSense, while also gaining access to all of the traditional publishers who have ad sales teams and are using DoubleClick. I can't tell you how many publishers I know who are using Google Ads on their site to generate revenue – just until they get successful enough to hire ad sales. Then they abandon Google and go for a more traditional advertising model. Now Google has both.
Also, as the line continues to blur between online and print and (especially) television and radio advertising – the advertising distribution method also starts to blur…. A quick trip out to:
CBS – cbs.Sportsline.com
NBC – www.CNBC.com
ABC – www.abc.com
Comedy Central – www.comedycentral.com
And I'll give you one guess at the ad network that serves and tracks banner ads on their pages…. That's right- Google (DoubleClick).
So, as things become more integrated on the ad front, of course the content distribution blurs as well. So, now content generated by CBS, ends up on YouTube as a distribution model (properly licensed of course) and the advertising online is served and tracked by Google. So, Google becomes a content provider with the advertising revenue without the headache of dealing with Hollywood productions.
As a quick aside, I think Nielsen should actually be shaking in their boots at the coming competition from Google. As the new media becomes integated, certainly new measurement will also take hold. We all know that online media has taken the "I don't know which half of my ad budget is the effective half" sentiment and made it untrue. New online media tracking will certainly get into more than clicks and impressions, but deep into "time spent", "atttention span" and consumer trends. Imagine Google Zeitgeist applied to Upfronts and developing new television shows.
Of course, none of that's new either. In the 90's businesses played around with letting viewers determine the format, outcome and plot of television shows. Does anybody remember Viacom's plans for Blockbuster's consumer database back in the early 90's
In short, I think the jury is still out on whether Google, Microsoft, Yahoo new online advertising offerings will really play out in any significant way. The one thing that's for sure is that for online marketers all of this is good news, and for content distributors (especially those that are still trying to figure out revenue models) this complicates things just a bit.
I'll post again after the call with an update. But for now – happy marketing.
Labels: Ad Networks, Aquantive, Google, Microsoft, Online Marketing, Yahoo
