Deal Moves Digital Advertising Beyond the Desktop

Microsoft's $6 billion acquisition of aQuantive was not only massive in terms of the purchase price--some in the industry have identified it as a significant step toward gaining market share beyond the desktop.

Combined with Microsoft's purchases of in-game ad server Massive Inc. and voice service provider Tellme Networks, and its push into rich media development with the Silverlight platform, the new deal "is about where digital advertising is going to be in the next three, four or five years," said Kevin Lee, executive chairman, Did-it. "When you look at some of the things like mobile Web and IP addressable TV that they've begun to tap into, it's clear that the strategy is to extend digital media far beyond the desktop."

The fact that Seattle-based aQuantive has already been developing Windows-based ad-serving technology bodes well for Microsoft's advertising enterprise, as any new products it rolls out will have back-end synchronization.

With search, for example, it will be easier to entice aQuantive's Avenue A|Razorfish clients to integrate adCenter buys into their digital strategy given the seamless incorporation of performance management and analytics capabilities.

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On a larger scale, Microsoft's purchase of an online marketing company marks a tangible shift in the ad industry overall, with the digital space slated to capture a larger percentage of the $600 billion business.

"It's been talked about in theory for years," said Shar VanBoskirk, senior analyst, Forrester Research. "But by trading so much money in this space, the big players are betting that marketers will follow, moving even more of their money away from traditional advertising."

Insiders also predict the Microsoft/aQuantive deal, like Google/DoubleClick and Yahoo/Right Media, will help create a more simplified navigational structure for online advertisers. "The consolidation means fewer players, more standards and more structure," said Matt Wasserlauf, CEO, Broadband Enterprises. "It will help us accelerate what is already a growing interest."

"Standards would definitely help," said David Hallerman, senior analyst, eMarketer. "So many traditional companies devote a relatively small percentage of their budgets to digital advertising because it can be so complex. This option of having a whole interactive campaign managed by one agency, from creation to buying, ad serving and performance management is a paradigm shift."

There are questions about just how much cooperation marketers can expect from these new "one-stop shops," however. While the main portals have agreed on such standards as ad lengths for paid search and site maps for organic search, no such agreement has been reached on email authentication, for example.

"With e-mail, advertisers have to play differently with all three (Microsoft, Google, Yahoo)," said VanBoskirk. "And these consolidations could cause the choice between being a 'Microsoft shop' or 'Google shop' to effect an entire campaign on a number of levels."

Speculation from advertisers, publishers and analysts will continue, as the implications of the GoogleClick deal have hardly begun to make themselves felt. In the coming months, campaign developments, revenue streams, and the all-important earnings calls will provide definitive answers as to how deeply these past few weeks have truly impacted the digital advertising industry as a whole.

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