• by Dana Ghavami , March 19, 2008

Brand Name Publishers and Big Media Companies: Google Ad Sense can be your best friend and Google Ad Manager your worst enemy. Using both is like loading a gun with Ad Sense for your unsold ad inventory and then shooting yourself with Ad Manager to save a few pennies on the dollar to serve your direct sold ad inventory.

In the process, you can lose dozens of pennies in revenue share when the ad network no longer needs to guess what others are paying you for your unsold inventory (by serving all your ad inventory for free). As they say, penny-wise and pound-foolish.

The Google Glock .45 Revenue Caliber is only as good as its available ad inventory and data. Give Google both and you might as well give them your company logo and revenue spreadsheet. And ask for their kindness, instead of competitiveness, on their revenue share of ad network dollars from Ad Sense.

Google the Network

Ad Sense is a great solution for unsold ad inventory, as far as it is kept outside of your closed doors. The more inventory it is given, the less competition it has with rival networks. Its appetite is unlimited like Seymour from "The Little Shop of Horrors." It only makes money from clicks, not impressions. Its end game is to capture as much of your inventory as possible for its own advertisers and click rates.

The more you give it, the less other networks' have, and competition is diminished for Google (not for you) and its margins maximized (not yours). Professional publishers have wised up and realized the less inventory given to ad networks, the better for their ROI due to making each network compete in the monetization of your unsold ad space.

Google the Dealer

Rather than compete for unsold ad inventory, Google will cleverly act like it owns your inventory. Google Analytics allowed the company to map out the industry using its solution by site traffic. Google Ad Manager will allow it to map out your entire ad revenue yield and use the information to maximize its own profit and minimize publisher revenue-share payouts. Once it identifies the penny above your average CPM from other ad networks, don't expect a penny more from them! Google the Publisher

Google runs the largest search destination, video destination (YouTube), and continues to foray into the media landscape with initiatives like Orkut. All in all, it's a publisher with significant ad space and competes for advertisers. Big media brands have awoken to Google's endless appetite for control and increasingly face off for eyeballs and ad dollars -- News Corp. and NBC Universal-owned Hulu is a case in point to counter-balance YouTube.

Google and Other Ad Network Revenue Security

High-end and non-competitive publisher ad management companies are the equivalent of The Slomin's Shield to act as a security system to protect your unsold ad space revenues from Ad Sense or other ad networks. Such solutions preserve the free market for all your ad inventory, just as ad exchanges have leveled the playing field for ad networks to compete for your unsold ad inventory.

Using Google Ad Manager is the equivalent of having a burglar set-up and provides your alarm system. You're inviting Google to learn the price and value of every piece of ad inventory in your house of content and letting them set YOUR Ad Sense revenue share after you turn on THEIR ad system that literally reports on what OTHER networks are paying you.

The Aftermath for Commercial Ad Management

First of all, free ad serving is not a new development. At the end of the day, you get what you pay for, so don't expect much. And don't forget that even Google suffered from detrimental scaling, downtime, delayed reporting, among additional issues with its free Analytics offering. Premium ad management solutions provided by commercial companies will likely be unaffected by the free offering for mid-market and enterprise customers as data privacy is key, richer features required by dedicated ad sales and operations teams, special services often needed such as toolset or system integrations and customization requests, as well as a professional degree of support that will certainly not come with a free solution.

Look at the analytics market today, Google Analytics did not put providers like Omniture or WebSideStory out of business, instead it emphasized the importance and need of getting your money's worth when using their pay-to-use products.

Nice move Google, and congratulations on DoubleClicking the largest security system for the professional publishing industry to offset your ad domination plans, but companies like CheckM8 are here to stand by the side of leading publishers and protect the balance sheet of the online ad industry.

If Google goes unchecked and has it their way, they would cut everyone in the media business a check for ad inventory based on a revenue share they deem best, on the backs of the organizations that actually created and delivered the content.

DoubleClick got away charging the industry 50 cents CPM over the past decade until competition put pricing in check in recent times. Google Ad Manager will attempt to maximize their own ad margins and control industry margins for the next decade and undoubtedly demand ad sale or inventory rights for use of their free ad server along the way. As the laws of physics dictate, every action requires an equal and opposite reaction.

Brand publishers need to use an independent ad server to keep Google and other ad networks guessing if you want the best bang for your half a buck in unsold ad inventory and ultimate vehicle to drive your direct-sold inventory (that makes up a majority of your ad revenue.)