What a power move — Google announced on April 13 that it has acquired DoubleClick. I believe that this is another significant and very brilliant move by Google – far more so than their purchase of YouTube earlier this year.
Here are six reasons why:
- Google has been the dominator in the search market, but other than distributing banner ads via their Adwords & Adsense network they have not had a stronghold in the more traditional online-media world of display (banner) advertising. This puts them in a very important role within this world.
This is an interesting position for them to acquire a piece of — DoubleClick isn’t a publisher or an advertiser, but it is one of the two main intermediary channels between publishers and advertisers. The other leader in this space is Atlas, followed by Mediaplex and others.
Look at it this way – there are two big highways and a handful of roads in this arena right now. Now Google owns one of those highways. What owning this highway will allow them to do is create a bridge (sorry for all the traffic metaphors – I’ve been spending too much time commuting lately) between their extensive network, and every other publisher and network which can be reached via DoubleClick – that expands their reach in nothing less than a mammoth way.
Imagine the day when, in addition to being able to publish Google ads on their search pages, partner search pages and the content network, there might be an additional option in Google’s interface which allows you to publish beyond their network onto anything reachable by DoubleClick. That’s huge.
- As is usual in this industry, there’s at least one strangely incestuous element in every deal. And here is one for this deal: aQuantive is the parent company of Atlas (the other ‘highway’). aQuantive is also the parent company of Avenue A/RazorFish.
This agency (which has been one of my favourite to watch lately) spent $542 million in online media billings last year, with 28% of this on search. If only 50% of this 28% was spent with Google (probably an underestimate), then they would have paid $75 million to Google last year. This leads me to wonder about conversations taking place at Avenue A /RazorFish now… such as "where do we spend that money this year, now that Google is a competitor?"; and ‘how can we possibly NOT continue spending significant dollars with Google?"
- We assessed about 10 different search marketing bid management tools last year to find the one that best met our criteria for such a tool. One of them was DoubleClick’s DART tool; and another was Atlas’ tool.
Neither had all the features we were looking for; but the Atlas tool seemed stronger than DoubleClick’s offering.
In all cases; bid management software providers seemed to be constantly playing a game of ‘crack the whip’ – every time Google or another search player made a significant change to their system, the bid management provider would have to work furiously to implement changes which would allow it to catch up and continue to support the search network’s new feature.
Now that DoubleClick is part of Google it will be interesting to see whether their search tool will be integrated for free (a la Google’s purchase of Urchin which allowed them to provide free analytics); or if at very least the tool will leap ahead of its competition in terms of functionality and speed with which changes are integrated. It will also be interesting to see if Atlas’ bid management tool starts falling behind, now that their unofficial ‘partner’ status has changed into ‘official competitor’.
- Speaking of bid management tools, when Yahoo launched Panama earlier this year, Stuart Larkins, of Performics (which is owned by DoubleClick) bragged that "DoubleClick’s DART Search is highly integrated with Yahoo’s new platform. DoubleClick was the first outside entity to access Yahoo’s test environment and utilize it for keywords, ads and reporting requests. DoubleClick’s DART Search will also allow major advertisers and online agencies to use third-party applications to manage programs on Yahoo."
Will DoubleClick’s tight integration with Yahoo remain like this now that Google owns DoubleClick? I think not. In a world where bid management tools haven’t integrated extremely well with search engines, this was a selling point for Yahoo – but it’s doubtful that it will continue to be one. I can’t see DoubleClick being "the first outside entity to access Yahoo’s test environment" ever again.
- Another reason why this is significant… it continues to blur the gap between search marketing and display advertising. This is one of the interesting trends in this space that has been emerging for the past couple of years. Is Google now a search player or an online media player? They can only reach a handful of search sites and searcher clicks, but via DoubleClick they have access to every major portal, site, and ad network out there – this must give them larger display reach than searcher reach now.
- Google has been criticized in the past by players in the online media world because they haven’t really supported third party tags for ad impression data. This means that the only source of data on impressions coming from Google’s network is Google itself. In the more traditional display world, companies like DoubleClick and Atlas have provided third-party data around ad impressions on portals, niche site and on ad networks. Buyers, advertisers and publishers all like third-party data because it provides an impartial source of data upon which to base assessment of results and billings. Now that Google owns its own third party (even though, once you own one, it’s kind of arguable whether you can still call it a third party), they will perceivably provide third party tracking via DoubleClick; and critics will have to find something else to criticize them about instead.
As with many big moves by Google, I’m sure there are at least 7 other reasons why this purchase is strategic and plays into Google’s big picture strategy for world domination, er, I mean, organization of the world’s information.
But as with many of the moves executed by the rocket scientists and Ph.D’s at Google, we’ll just have to wait with the other mere mortals to see how Google capitalizes on this purchase.