The Buy/Sell Distinction in Ad Operations
By Andrew Frank | November 21, 2009 | 3 Comments
Blogging is sometimes a great way to get interesting dialogs going, and yesterday’s post, Will Microsoft Exit the Ad Server Business?, drew a notable response from Harrison Magun, Director, Advertiser Tools and Technologies Specialist Sales at Microsoft. Harrison takes me to task for failing to make a crucial distinction between ad servers for publishers and ad servers for advertisers. In his words:
Publisher Ad Serving and Advertiser Ad Serving are different products.
Harrison then goes on to say that advertiser ad serving is core to Microsoft’s advertising platform, and points to the Atlas Technology Partner Alliance, a factor that was also communicated to me by others at Microsoft. (He doesn’t comment on the publisher side.)
While it’s undeniably true that these are different products, they share core functionality in common, and, perhaps more important, have both been historically marketed side-by-side under the same umbrella brands (Atlas and DART) for some time. In the blog medium one is often challenged to compress things to the point where certain distinctions are omitted, but perhaps in this case the distinction is important, because it’s plausible that Microsoft could exit the publisher (or “sell-“) side of the server business, yet still reinforce its commitment to the buy-side.
While such a strategy would not completely eliminate conflicts (advertisers and agencies still need assurances that their tools will give them neutral access to all available sources of inventory), the conflicts are less prominent than on the sell side where many online publishers consider MSN a direct competitor.
Moreover, as Harrison also points out, Microsoft has invested in “engagement mapping,” a strategy to shift the attribution of conversions from the “last click” (which is usually from a search results page) to ad exposures within a certain time period (more often display ads). This is widely seen as an attempt to reclaim some of the credit that Google, as the dominant player in search, has by convention been awarded by advertisers and move it into the display channel where Microsoft has more to gain. This strategy does require Microsoft to keep its hand in buy-side tools.
Microsoft also has a strong record of working with agencies on tools, where there is arguably more upside than on the publishing side. For example, Microsoft has worked extensively with Mediabrands, Interpublic’s media agency holding company, on what they’ve dubbed “the first holistic advertising platform, the Media Operations Management System (M.O.M.S)” (announced here). So, while Google/DoubleClick appears to currently have a wider lead on the buy-side than the sell-side, it’s very possible that Microsoft could continue to press on this front even if they reconsider their sell-side positioning.
So, mea culpa for omitting this distinction in my post. However, an even more critical distinction that I believe is too frequently glossed-over by the marketers of these products is the distinction between an ad server and an ad network. I’ve heard analyst claims that this distinction is fading, that the ad server will eventually be replaced by the network. This is a dangerous idea. Both publishers and agencies will continue to need tools which allow them to book and manage their own directly negotiated transactions without intermediaries and with a minimum of pricing friction. And both sides are increasingly recognizing that when tools are bundled with inventory from the same vendor, their position is weakened.