• by Amit Rahav , May 9, 2007

Just when you thought the Google-DoubleClick deal was big news, Yahoo! strikes back and buys ad-exchange provider Right Media. Add to that the recent news of talks between Yahoo! and Microsoft, and you get the distinct impression that the only constant in our industry is change. Not a week goes by without news of a media innovation, breakthrough idea or... yet again... a merger or acquisition. There's little doubt that search and display form a great ad combination. Indeed, customers report a clear lift in performance of each channel when used jointly. However, Google's acquisition of Doubleclick and related developments are less about increased online ad performance and more about future shape of the publishing business.

Opposite Yahoo! and Microsoft, Google is the one most expected to revolutionize the media package buy, much in the same way it has revolutionized online marketing with the pay-per-click model.

With DoubleClick, Google not only bought an ad exchange opportunity, but the installed base of the two-pronged DART franchise - with its Publisher and Advertiser flavors. This move stretches the definition of the publisher role farther than ever before. Combining DART, an ad exchange, and Google's heritage of advertiser direct creates a potentially frightening situation for agencies. Add to that Google's entry to offline media, including TV, radio and print, and a rather sinister master plan begins to unfold.

The move is part of a trend toward giving the seller more power throughout the value chain. With 2006 revenues of $7.14 billion, Google already claims a quarter of the online ad revenue worldwide. Moving from search to display and the offline ad channels, it appears that Google is assembling the ultimate media one-stop-shop for advertisers - a Wal-Mart of Media, so to speak.

This gets even more intriguing when you consider why ad servers were developed initially: To manage and audit multiple advertisers. DoubleClick's success is borne out of being the first independent solution - not affiliated with publishers. This gave agencies and their brands power online. In fact, some years ago, DoubleClick sold its ad network business to maintain an independent position. Now the auditor becomes the audited supplier.

Yahoo Chief Executive Terry Semel voiced the concern of publishers that those who valued DoubleClick for its independence are having second thoughts. He said: "My guess is there'll be some who are fine and there'll be many who, perhaps, aren't fine." A diplomatic way of suggesting that publishers will be gutted and agencies will have ample reason to be furious.

WPP's Martin Sorrell, in an interview, said "Google is a short-term friend and a long-term enemy and probably the shorter term just got a little bit shorter and the longer term got a bit closer as a result of the DoubleClick acquisition." Other agency executives expressed similar concerns in personal conversations.

By controlling the budget, a media agency provides brands with buying power and consistency. What's more, agencies offer strategic guidance. Remove the agencies, as Google would have it, and you take away the agency value proposition, not to mention the brands' spending power. Brands will then suffer without the fresh perspectives they need to maintain and grow.

An alarming a scenario as it is, it isn't Google's-way-or-the-highway. The alternative is campaign management, the only way to guarantee an independent audit of online marketing activity. Before it officially gets gobbled up by Google, DoubleClick is in this space as are Atlas, a unit of aQuantive, and independent Eyeblaster.

As digital marketing becomes ever more fragmented and sophisticated, the industry and those it serves demand a consolidated answer. Google's version is one worth considering, particularly for small-to-mid-sized advertisers. For larger brands that rely on agencies to add strategic value and buying muscle, it's not the smartest long-term play. Publisher-agnostic campaign management can play a role. It's an opportunity agencies and advertisers should pursue.