April 14th, 2007

Google Acquired DoubleClick To Create A People-Driven Advertising Platform

by

I sat in on a presentation by a Google rep to a New York agency — it was a big, wet sloppy kiss. Here was Google, king of impersonal, self-serve online ad efficiency up to its eyeballs in gooey “relationship building.” It’s no accident that Google’s New York office has more humans than servers.

This is the main reason why Google acquired DoubleClick — relationships. From the Official Google Blog post:

To that end, we are truly excited to announce our acquisition of DoubleClick. DoubleClick provides a suite of products that enables agencies, advertisers, and publishers to work efficiently, that will enable Google to extend our ad network and develop deeper relationships with our partners.

Google has realized that it cannot growth solely through the value proposition of hyper-efficiency, because most of the ad dollars are still controlled by companies focused on “branding,” which is far from hyper-efficient, to say the least. As Fred Wilson points out:

But, banners carry branding value that text ads don’t. The return on investment measure is not as cold and hard with banners. And the big branded advertisers that are leaving TV and print in search of better performance on the internet want to be able to brand with their ads. And they want to control where those ads are run. They’ll pay more for those two features.

In other words, brand advertisers will pay more not to be raked over the coals of hard ROI. And this isn’t necessarily a bad thing — while a lot advertising is probably still wasted, a media and marketing world driven entirely by Google’s hyper-efficiency would not necessarily be an attractive place.

Ultimately, Google knows that control advertising means controlling the fuzzy middle between branding and direct response:

Fuzzy Middle

Ads served by DoubleClick exist in the fuzzy middle, and those ads are still bought and sold more via connections between people than they are via connections between machines.

The Google rep I heard present towed the party line about Google not wanting to be an ad agency — and that’s probably right. Instead, Google is creating a people-driven platform centered on their huge regional offices and DoubleClick’s advertiser and publisher relationships.

People aren’t nearly as efficient as machines, but that doesn’t mean they can’t be programmed to feed Google’s money making machine.

Comments (29 Responses so far)

  1. “People aren’t nearly as efficient as machines, but that doesn’t mean they can’t be programmed to feed Google’s money making machine.” (”Google Acquired DoubleClick To Create A People-Driven Advertising Platform”)

  2. announced today they would be placing radio ads for Clear Channel. Business integration Will DoubleClick’s client base (Yahoo is one) be spooked by Google’s monopolistic hold on online advertising ? Can Google sell its consumer-centric ad server model to its new DoubleClick clients? Ad auctioning is revolutionary and efficient, but it can disintermediate. Technorati Tags: Google, DoubleClick, ad server, Microsoft, yahoo, panama, banner ad, adwords

  3. Google Acquired DoubleClick To Create A People-Driven Advertising Platform » Publishing 2.0

  4. Hace tiempo me suscribí a este blog, no sé muy bien por qué. El caso es que cada día me leo tus paridas, supongo que intentando volver a alguna que me hizo gracia en su día. Pero eso no sucede.» Publising 2.0 : «People aren’t nearly as efficient as machines, but that doesn’t mean they can’t be programmed to feed Google’s money making machine.» Archipelago: «People don’t read books very much. Although they sure do talk about them.

  5. Google Acquired DoubleClick To Create A People-Driven Advertising Platform » Publishing 2.0

  6. [IMG]If the future of advertising is online, many companies, including Google

  7. Rollstühle brauchen, nicht zu sein etwas sich zu fürchten. Dort können kommen eine Zeit, als, einen Rollstuhl zu verwenden notwendig wird, und ältere Bürger und untaugliche Leute stellen fest, dass… Comment on Google Acquired DoubleClick To Create A People-Driven … a digital marketing, ad serving, and ad network company ? following on the heals of Google?s acquisition of DoubleClick, Yahoo?s acquisition of Right Media, and WPP?s acquisition of 24/7 Real Media (which [?]

  8. Comment on Google Acquired DoubleClick To Create A People-Driven …

  9. Reflecting the high stakes at play, Microsoft will pay $66.50 per share for aQuantive, an 85 whopping percent premium to aQuantive’s Thursday price of $35.87. It comes after advertising giant WPP moved yesterday to buy 24/7 Real Media, and Google’s recent purchase of online advertising company DoubleClick, and Yahoo’s announced acquisition of Right Media Inc. for $680 million.

  10. business model. No, I think Google wants to inflict a truly vicious wound on Microsoft, in the soft underbelly of Microsoft’s core business, in order to weaken Microsoft’s ability to compete with Google for the real prize — online advertising. Google acquires DoubleClick, and Microsoft responds by acquiring aQuantive. So how does Google respond? By launching Google Gears, an OPEN SOURCE platform that enables not just Google apps to be used offline, but for any developer to make ANY app available offline.

  11. The reality is that the market for brand advertising is still very “squishy,” it’s more about perceptions and relationships than hard ROI. That’s one reason why Google has struggled with brand advertising and had to buy DoubleClick to acquire the relationships with media buying agencies that control brand advertising dollars — and why Yahoo and Microsoft followed suit. Brand advertising will be a big driver of growth for online advertising, and the challenge for online media companies is to optimize ad

  12. GoogleClick: Positioning for the Integrated Search and Display Exchange, JupiterResearch’s David CardGoogle Acquires Internet (May 2017), Google BlogoscopedDoubleClick’s Past, Google BlogoscopedGoogle Acquired DoubleClick To Create A People-Driven Advertising Platform, Publishing 2.0Doubleclick + Google: Looking at Some of the Doubleclick Patent Filings, SEO by the SeaGoogle to own a SEM and SEO firm?!, Stephan Spencer

  13. Reflecting the high stakes at play, Microsoft will pay $66.50 per share for aQuantive, an 85 whopping percent premium to aQuantive’s Thursday price of $35.87. It comes after advertising giant WPP moved yesterday to buy 24/7 Real Media, and Google’s recent purchase of online advertising company DoubleClick, and Yahoo’s announced acquisition of Right Media Inc. for $680 million.

  14. Google Acquired DoubleClick To Create A People-Driven Advertising Platform » Publishing 2.0

  15. [...] Scott Karp postulates that “Google acquired DoubleClick to create a people-driven advertising …,” noting that “It’s no accident that Google’s New York office has more humans than servers.” [...]

  16. why is Google going backwards? It just bought a web 1.0 firm, from the guys who are a web 1.5 firm. (Shakes head)

  17. [...] Google Acquired DoubleClick To Create A People-Driven Advertising Platform » Publishing 2.0 branding, direct response and the fuzzy middle (tags: marketing advertising google) [...]

  18. Double click will implement a trading market for digital ad space (maybe similar to ebay). It’s only a matter of time before they start trading ad space futures (maybe similar to nasdaq). I expect that Google has its eye on the untold billions to be had from owning the market that houses ad space speculation. They may have to jump through hoops for the SEC, but if they’re pretty much the only game in town, they may get a charter: the money to be made would be staggering. If you combine that with the revenue they get for Adwords, they could end up “doing advertising to support their computing habit.”

    It would make media buying a lot easier, though. Price and value would have a more direct relationship than they do now.

  19. [...] abuzz about what these synergies might be – and merit a post in its own right. See Fred Wilson, Scott Karp, Hipmojo, Donna Bogatin, Phil Wainwright, and Sim [...]

  20. Great post. With this acquisition, isn’t Google betting that it can make online branding less people-driven? In other words, the squeeze is on for the fuzzy middle.
    If Google does not see a strategy to bring direct response-like efficiency to branding, then one would have to conclude that this acquisition is defensive. The question for Google is: will it take as long to figure out this riddle as it has to figure out online video distribution after the YouTube acquisition?

  21. Don’t let Google Fool you. They would aquire any advertising agency with a bunch of clients. Make the pie bigger so to speak. Google wants to dominate advertising like Microsoft does the OS. Not many people understand this yet, but once Google does have a Monopoly on advertising on the Internet, they can then truly make the OS less important.

  22. Scott,
    Did you purposefully invert the pyramid, so direct response (Google) wouldn’t be at the top?
    Max

  23. [...] I sat in on a presentation by a Google rep to a New York agency — it was a big, wet sloppy kiss. Here was Google, king of impersonal, self-serve online ad efficiency up to its eyeballs in gooey “relationship building.” It’s no accident that Google’s New York office has more humans than servers…People aren’t nearly as efficient as machines, but that doesn’t mean they can’t be programmed to feed Google’s money making machine…The Google rep I heard present towed the party line about Google not wanting to be an ad agency — and that’s probably right. Instead, Google is creating a people-driven platform centered on their huge regional offices and DoubleClick’s advertiser and publisher relationships. Publishing 2.0 [...]

  24. [...] 24/7? To compete with Google and Yahoo. Google AdSense is the largest ad network in the world, and Google recently acquired DoubleClick, which owns the #1 display ad serving solution (24/7 Real Media has the #2). Google offers free [...]

  25. [...] — a digital marketing, ad serving, and ad network company — following on the heals of Google’s acquisition of DoubleClick, Yahoo’s acquisition of Right Media, and WPP’s acquisition of 24/7 Real Media (which [...]

  26. [...] than hard ROI. That’s one reason why Google has struggled with brand advertising and had to buy DoubleClick to acquire the relationships with media buying agencies that control brand advertising dollars — and why Yahoo and [...]

  27. [...] the future of advertising is online, many companies, including Google, Yahoo, Microsoft, and WPP, are betting that the future of online advertising is in ad networks, [...]

  28. It still remains to be seen if the Double Click deal will be approved by Congress but it does seem as though they are going to let it go through. Score another one for Google.

Add Your Comment

Subscribe

Receive new posts by email