4A's And ANA To FTC: We Want Answers!

by Tameka Kee, May 31, 2007, 6:00 AM

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With a joint letter to the FTC and the Justice Department, the 4A's and the ANA made it clear that marketplace restriction is one of the possible implications of the $11 billion wave of online advertising mergers and acquisitions.

"Advertising on the Internet is one of the fastest-growing sectors of marketplace promotion," the letter said. "Therefore, ensuring its competitiveness is critical for all participants."

So while market analysts, bloggers and journalists alike have been content to theorize how deals like Google/DoubleClick and WPP's acquisition of 24/7 Real Media will affect how online advertisers do business, the two major advertising associations want definitive answers.

"When all of the acquisition announcements came out, we said, there's so much stuff going on here and we don't know what the implications are," said ANA CEO Bob Liodice. "We simply asked the people who could best assess this to use the tools and ability and look at the market dynamics as a whole."

Given the FTC's wealth of antitrust experience, relative manpower and federal budget, the agency is well equipped to tackle both micro issues such as how the merged companies should handle pricing and inventory management, and macro questions such as whether the deals affect just online advertising or advertising as a whole.

While neither organization would comment on specific concerns, maintaining industry-wide competitiveness was a key consideration. "As a trade association, we have a vested interest in making sure that the Internet remains competitive as an advertising/marketing space," said Adonis Hoffman, legal counsel for the 4A's. "But it's fair to say that a lot of people are looking at the impact that these combinations will have on the marketplace."

Industry players--from publishers to brand executives to smaller ad networks--will be affected by how these deals play out, but independent agencies offer a unique perspective.

"I think the big issue will be what are the definitions of the categories of business," said Tom Bedecarre, CEO of AKQA, the largest remaining independent agency, which took a majority investment from private equity firm General Atlantic Partners earlier this year. "The people putting up noise are doing it for competitive reasons. It smacks to me of paranoia and fear in the face of change."

According to Gal Trifon, Eyeblaster's founder and chief executive officer, "these deals erase the familiar demarcation lines. When the dust finally settles after the recent frenzy of acquisitions, we believe that this complexity will drive demand for independent campaign management solutions."

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