Today the news of Google’s imminent release of their free ad serving platform, Ad Manager, hit the web. Imminent, because for years now the commoditization of ad delivery for publishers has been in the air. And yet surprisingly, at the time of this writing this isn’t even a topic on TechMeme. A short post on TechCrunch completely misses the point, claiming this move to be Google’s entry into the ad management game.
Saying that is like saying that the acquisition of Urchin was Google’s entry into web analytics. It is, of course, everything but that. The parallel is interesting to make. Both services require significant investment, and both will be offered completely free to the publishers. Most importantly, both serve the unique purpose of collecting data on traffic, ad performance, and audience in order to maximize Google’s ad revenue.
Although at first sight this seems like yet another announcement of a small app, this move is fundamentally important because it is clearly putting Google in a blatant conflict of interest. Ad Manager’s promise is essentially the ability to use it as you please, which may include ads from third-party networks and exchanges. However, witnessing the performance of all ad inventory on a site, including ads served by other sources, puts the small publisher’s revenue directly at the mercy of Google’s SkyNet. Since the publisher’s AdSense revenue share is completely arbitrary, the revenue given back may simply match the eCPM being attained with other networks.
In addition, running ads from other networks and exchanges may serve as an optimization test for Google’s own ad products. If before Google had third-party ad performance results only from Analytics, now they complete the picture by serving the inventory first-hand. This means that a site that runs, say, a credit card ad from ValueClick without much success, automatically discloses to Google this information, allowing it to make the decision of not serving credit card ads on that same site in the future. In other words, they will use others’ money to make their product more lucrative for themselves. And of course, since the acquisition of DoubleClick cleared, AdSense is just the beginning of it.
Interestingly enough, Google Analytics now shows me this gem of a message:
At least they have the decency to ask.
The exact same strategy is being pursued in traditional advertising. A few days ago, Google’s Tim Armstrong announced the upcoming “dashboard” allowing advertisers and agencies to track the performance of all their online and offline initiatives — including results from Google’s competitors (and I won’t even get into their partnership with Publicis).
For other companies working in the space of ad delivery and optimization, such as the recently funded OpenX and PubMatic, as well as my so far unannounced project, this shows that we are on the right path. It makes little sense for publishers to put wolves in charge of guarding sheep.
This area is ripe with opportunities, but as always, openness and disclosure are key.
