Andrew Frank

A member of the Gartner Blog Network

Andrew Frank
Research VP
5 years at Gartner
30 years IT industry

Andrew Frank specializes in best practices for data-driven marketing, including how organizations can use data to drive sales, loyalty, innovation and other business goals. Andrew also specializes in marketing and advertising technology and business trends …Read Full Bio

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Google Buys a DSP

by Andrew Frank  |  June 3, 2010  |  2 Comments

According to All Things Digital, Google has acquired start-up demand-side platform (DSP) Invite Media for $70 million.

It’s no surprise to see Google buy a DSP, as it was one of the few links in the online display advertising value chain in which Google didn’t already have a dominant presence (the other would be supply-side yield optimizers, which have had strained relationships with Google). But it does rekindle the issue of whether an entity such as Google, which happens to be the largest seller of online advertising, can continue to provide both media and the platforms for trading media in a neutral way.

Google now counts among its display ad assets the dominant buy-side ad server (DFA), the dominant ad exchange (AdX), and the dominant sell-side ad server (DFP). Threading these together is the ubiquitous DoubleClick cookie, which, with the inclusion of the vast AdSense network, is evolving into a kind of Rosetta Stone for user data in the display targeting world. As tactics like Real-Time Bidding (RTB) become more prevalent, Google is now well positioned to parlay its search success to drain the clutter out of the display advertising ecosystem and permanently lay to rest the “one trick pony” charge.

But the issue of neutrality won’t go away. As noted by Allthingsd, Invite counts among its clients Vivaki, one of the largest digital ad buyers, which must maintain its ability to buy ads from Google’s competitors on an equal footing with Google. As Google seeks advantage by integrating Invite with DFA and AdX in subtle and attractive ways, pressure for neutral solutions will build, and Google’s competitors are likely to start to find sympathetic ears among anti-trust regulators for whom the analogy of a bulge-bracket brokerage house owning a major stock exchange and the trading systems it supports won’t seem like too much of a stretch. And privacy is already on the minds of politicians who are likely to see the ubiquity of Google’s cookie-based targeting technologies as a target of opportunity themselves.

Media agencies, nostalgic for the 15% commission days of yore, are already looking at Google’s 32% “commission” on AdSense ads with envy and contempt. (Although Apple iAds’ 40% may make this look like a bargain.) And publishers…well, we don’t need to go there. Suffice it to say that the path to seamless integration for Google across its chain of display assets is full of hazards. But then again, in the pursuit of ad businesses, they haven’t tripped up yet, and I wouldn’t bet against them. But a strategic spin-off of AdX – down the road, once all the tools integration is complete and mobile and TV have been added to the mix – may yet produce the ultimate winning end-game.

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