By 2009 Google Will be More Dominant in Online Display Ads Than Search!!!

Big news by Google. After announcing the DoubleClick acquisition (~ 60% of the display ad market), Google announced the launch of Ad Manager, a free ad management tool with built in yield optimization. Ad Manager allows you to sell direct ads, and then backfill with AdSense and/or any other ad networks you choose. Huge for Google for 5 reasons:

  • minimizes the value and risk of competition from larger ad exchanges like Right Media, smaller start ups like the Rubicon project, and open source ad networks like OpenAds
  • gives them yet another way to follow web users across the web to create a proprietary web graph based on usage data (along with Google Analytics, Feedburner, RSS Reader, iGoogle, AdSense, search accounts, Gmail, Google Talk, Youtube embeds, and Google Toolbars)
  • allows them to spy on other ad networks such that they can quickly buy out the competition and/or clone any features from newer ad networks more profitable than their own
  • this allows Google to establish more meaningful relationships with publishers, and help recruit publishers to the DoubleClick level once they get big enough
  • Google has yet another way to spy on any competing web service (outside of ad networks) and be alerted to change before any competing networks

YouTube probably gets about as many pageviews as Google does. By aggressively running display ads on YouTube, Google could likely take that 60% marketshare to 75% in a matter of months. Add in the self-serve expanded network for smaller publishers, and they are well over 80% of the ad display market inside a year.

Published: March 13, 2008

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Comments

neerav
March 13, 2008 - 11:33am

I've applied for an account and will hopefully get accepted in a matter of weeks rather than months (fingers crossed) - I'm interested in seeing if it works because I tried the Rubicon project auto ad-optimisation and thought it was poor

The scary thing is that even when a publisher tries to diversify away from Google eg: by getting Feedburner RSS subscribers or selling ads direct they either buy the new service (Feedburner) or find a way of being an intermediary (Ad Manager)

March 13, 2008 - 11:59am

Once again, you tell it like it is, brother!
Behold the behemoth - goog.

March 13, 2008 - 12:14pm

I still can't figure out if this Googles domination is a good or bad thing, I've always had love for google but its what they might do with their authority which scares me!

March 13, 2008 - 8:59pm

Does this mean Google will offer in-text ads?

March 13, 2008 - 9:40pm

Google already does offer in text ads. And has for a while. I sarcastically made this page a while ago. And, at the same time, I also made thousands of dollars of profit as a publisher who blended a few text ads into my content (I think one advertiser meant to put $20 as their lead price and had it set to $200 for a couple weeks)...which was pretty sweet for me...I just wished I would have had more traffic back then!

March 14, 2008 - 5:30am

You're right on about the impact. However, you might care to mention - and I'd say you should mention - that others were first to market here: http://www.pubmatic.com/. (No affiliation, not even as a member, so I don't feel bad link dropping.)

March 14, 2008 - 6:39am

Hi Aaron,
Rajeev Goel here, co-founder and general manager of PubMatic. You bring up some great points with respect to the benefits to Google of Google Ad Manager. It's also interesting to think about this from the publisher's perspective. Is Google Ad Manager good for publishers?

Google's announcement of its free ad server is interesting but not entirely new for the market. Free ad servers have been around for some time now, including OpenAds and Expo9 from Exponential Interactive (the company behind Tribal Fusion).

From PubMatic's perspective:
- Google Ad Manager, like all ad servers, is complementary to PubMatic. Many publishers who use PubMatic do so in conjunction with their ad server, such as DoubleClick's DART for Publishers, Atlas, or Zedo. The ad server is typically used to manage direct-sell campaigns while PubMatic is used to optimize across the publisher’s ad network relationships.
- While Google Ad Manager integrates AdSense, the leading solution for cross ad network revenue optimization remains PubMatic. PubMatic is working with multiple publishers who are already using Google Ad Manager. These publishers manage direct-sell campaigns with their Ad Manager ad server and drive increased revenue from the rest of their inventory by letting PubMatic automate and optimize ad serving decisions for them.
- Publishers should be wary of utilizing the same vendor for both ad serving infrastructure as well as an ad network. Combining the two represents a significant conflict of interest, which can disadvantage the publisher with respect to monetization.

For more on our view of the announcement, please see our blog here: http://www.pubmatic.com/blog/?p=16

We also show an example of how utilizing the same vendor for both ad serving as well as an ad network can lead to poorer monetization for the publisher.

- Rajeev Goel
PubMatic co-founder and general manager

March 14, 2008 - 9:00am

Is Ad Manager just opening up a new network of advertisers (advertisers who belonged to Double Click) to publishers? What's the real benefit for a publisher? In my experience image ads have terrible click through rates (and getting worse as blindness increases) but work for awareness - I looked at the Ad Manager tour and it looks like the publisher would be paid by clicks. Maybe I'm looking at this too simply, but from a publisher's point of view, I'm not too excited about Ad Manager.

March 14, 2008 - 9:43am

Ad Manager provides an independent third party system for ad management. You do not need to opt into serving Google AdSense or DoubleClick network ads to use the service.

March 14, 2008 - 4:58pm

Aaron--

I'm responsible for the publisher program at the Rubicon Project. Google's Ad Manager is a welcome development for many publishers who are looking for a way to manage relationships with direct advertisers. I know a good deal of our publishers use Ad Manager and are pleased with the ability to manage direct advertisers (just like many are pleased using DFP, Atlas, 24/7 and OpenX).

Ad Manager still doesn't (nor is it ever likely to) automate the management and optimization of ad networks-- you still have to figure out which ad networks you should be working with, try to sign-up with them and deal with contracts and set-up, log-in to each ad network report to download the latest revenue data, plug in that data every day/week to AdManager in order for it to know how to serve the ads (among all the other fun stuff)....

For more info about the Rubicon Project, our CEO and co-founder Frank Addante has just posted an "update" video on all of our progress (7 billion ads served across hundreds of websites and 3 major awards in 2 months): http://rubiconproject.com/press/video

This is definitely an exciting (and confusing) time for publishers-- should be an interesting few months and years.

Best,

JT
the Rubicon Project

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