Magazine article Marketing

Andrew Walmsley on Digital: Google Must Allay DoubleClick Angst

Magazine article Marketing

Andrew Walmsley on Digital: Google Must Allay DoubleClick Angst

Article excerpt

Google's acquisition of DoubleClick is probably its most significant to date. The search giant's failure to persuade the marketing community to adopt its display advertising products had put it behind both Microsoft and Yahoo! in terms of integrating search and display, and was beginning to cause concern among the investment community.

With this deal, Google hopes to address this - allowing it to adopt the position of intermediary between advertisers and consumers in display that it has so successfully established in search.

But some publishers are crying foul, and agencies and advertisers are also concerned: is this a good deal for them, or is Google going to use the potential monopoly it gives it to disempower advertisers and publishers to its own advantage?

DoubleClick's business is roughly a 50:50 split between providing ad-serving solutions for publishers and advertisers.

Publishers are concerned about the potential conflict of interest that DoubleClick will face. Google is a major competitor to, as well as a major revenue source for, many online publishers, and their worry is that by handing data about their clickthrough rates, traffic and audience to a Google firm, they are boosting Google's ability both to compete with them as a media owner and negotiate with them as a supplier of search listings.

However, DoubleClick is unlike many of Google's previous acquisitions in that it actually makes money. Having agreed to pay dollars 3.1bn for it, observers hope the new owner will not want to kill the goose that lays the golden egg. However, the revenue from this service is small compared with Google's total income, and for many publishers, this will not be enough reassurance.

One of the spurned suitors, Microsoft, is pushing for the competition authorities in the US and the EU to step in and halt the deal, alleging that it will give Google control over 80% of ads seen by consumers Setting aside the irony of Microsoft calling 'monopoly', and ignoring the sour grapes that losing the deal is no doubt making it feel, it has probably got a point.

Meanwhile, advertisers and agencies are also troubled. Their approach to media has always been strengthened in negotiations by the fact that they knew things that media owners didn't. Armed with conversion data by site and the cost of alternatives, any half-decent bluffer could succeed in negotiations.

Having one of the world's biggest media owners take control of all this data is not going to go down well at all. …

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