TruEffect Blog

Being Independent Means Squat

Now that the Google DoubleClick merger is going ahead, we can expect a raft of cute positioning from folks claiming they are truly the independent choice for ad-serving or the real alternative to the dominant monopolies.

That is, of course, until they get acquired or subsumed into one of the aforementioned dominant groups – and frankly, who cares? Having made a career of taking the road less traveled and enjoying every minute of it, I’ve learned that independence of thinking is different to independence of affiliation.

The independent thinkers deal with the why – not questions, not the fast-follower positions. I’m blessed to be surrounded by people that are transacting in that way right now and creating something that delivers to what advertisers know they want, but didn’t know they could have. And that’s the ability to control media operations from their platform, or develop new media metaphors quickly and effectively without paying gobs of margin on media services.

So, if it’s true independence you want, you need to go a little deeper than the veneer and work with people who live it.

- Martin Smith

Microsoft Yahoo Google - and so it begins

My new favorite DirectTV program to watch as I traverse the country on Frontier Airlines is the World Poker Tour. It’s somewhat addictive to watch the drama unfold as a cast of characters work their opponents, bluffing with outrageous showmanship or mature guile. Not unlike the drama we are starting to see unfold as Microsoft squares up to Google with the proposed acquisition of Yahoo! – “And so it begins.”

Microsoft is one of those companies that you never really root for but would be foolish to bet against. Microsoft understands distribution better than anyone. They also understand how to leverage their distribution and create participation and partnerships. Google paradoxically is less participative and more utilitarian. You use their services. Microsoft’s moves are generally substantive and focused on revenue rather than traffic and audience.  They are able to execute with a single point of focus, which is amazing for a company their size.

That is not to minimize Google’s tremendous growth. However, a lot of their recent announcements have been more about the company’s aspirations, than substance. This creates pressure on their core revenues, which the last reported earnings show are having to work a lot harder because Google has hired ahead of its growth. Microsoft has significant diversification across its lines. It also has more key opportunities in the larger convergence pie than just the media revenue element of the web – Xbox, Uverse, In-car mobile and .NET. This pie is substantially larger than just media revenue. For a good in depth analysis look at:

http://www.pwc.com/extweb/pwcpublications.nsf/docid/5AC172F2C9DED8F5852570210044EEA7.

What Microsoft understands is how to leverage the extensibility through its architecture. Our own Truadvertiser.xls is a very good example of how this works, with a seamless integration between the desktop and the delivery architecture that works beautifully. This will challenge the regulators looking at the deal, as Google has not been slow to point out. However, application extensibility is the same between the desktop as it is to the mobile device. Google has a great little mobile GPS product to the handset – are they leveraging their web presence in the same way? The Yahoo! deal will grease the skids of this distribution and give them parity in the media side of the space.

On the other hand, Google understands data like no one else in the space. They know the value of utilizing data to create relevance in advertising thereby creating the efficiencies. Their Achilles is the same as AOL’s was ten years ago – they are a walled garden. When the next killer app(s) comes along (and it will) the lack of diversification and partnerships could be crippling. At that point they’ll have to bluff really well to win a pot with 10 high!

- Martin

Google and DoubleClick - It's not over 'till it's over.

An interesting article today in MediaPost EU Continues to Scrutinize Google-DoubleClick Deal, with Consumer Privacy concerns continuing to drive the debate.

- Scott

FTC Okays Google/DoubleClick Deal: Early Holiday Gift or Lump of Coal?

Yesterday’s approval by the FTC of the Google DoubleClick merger lays down one more hurdle in the consolidation of the major interactive media delivery channels. Given the frenzy of interest from reporters earlier today, though expected, it was still somewhat of a surprise.

In parallel the FTC also released the discussion document – “Online behavioral advertising – Moving the discussion forward to possible self-regulatory principles”.

So how should we determine these portents as we end another year of hyper growth in the interactive media space? Is it an olive branch to the EU around the ruling that the US will start to take consumer privacy more seriously? Perhaps, though most of the EU focus has been on competitive aspects of the merger, not privacy. In fact both Google and DoubleClick have been involved in the debate (as indeed they should be given the legislative risk). Perhaps it’s just coincidence as folks clear their respective to-do piles before leaving for well-earned rests. Given it is an election year, next year the privacy football will likely get as much air as a Brett Favre touch-down pass, so they’re going to be super-busy.

So for the industry, is it a gift or a lump of coal? For the publishers, the consolidation of such data without a clearly articulated position continues to be concerning. Given sites focus on yield, how much inventory they can sell directly how much they divest to networks which now includes Google. If Google can leverage position through its use of data to improve yield and take more of the top, it is definitely coal.

So that makes it a gift for the advertiser right? Not necessarily. The recent acquisitions by both Google and Microsoft shifts the pendulum of media control into very few hands and potentially can restrict the effectiveness the advertiser can garner to the new and emerging technologies. Or it at least corrals the advertiser in a continual cycle of pay-as-you-go, not great for the advertiser. This problem will be fixed on January 29, but until then – coal!

And for the consumer? Sorry, coal again. But we can’t lay that puppy at the feet of just Google and DoubleClick. We all need to elevate the standards of notice, choice, and consent in the space.

With so much coal going around at least we’ll be warm, and I think we can look forward to next year when the gap created by the acquisitions will make way for new and exciting technologies that deal with some of these issues head on and invigorate the ad serving industry.

Best and seasonal greetings, especially to Hellman and Friedman, for whom the gifts may be a little late.

-Martin