The Brave New World of Ad Serving

by Dana Ghavami, Wednesday, Jun 6, 2007 6:00 AM ET
THE AD SERVING INFRASTRUCTURE FOR online advertising has undergone a dramatic transformation in just a few weeks. A relatively transparent public-facing business for the benefit of the entire online ad industry has been bought out by owners which I suspect will put their own interests above those of the industry as a whole.
The Shake Down
Having nearly all the major ad serving companies being acquired is like breaking in to the Central Bank of Media and taking over the tellers. All deposits and withdrawals now go through the new owners. This will not be without consequence.
Coercion
Taking control of the industry ad serving infrastructure is just the beginning. Next might be control of your unsold inventory in return for reduced or cost-free ad serving. Upon seizing the site, an ad exchange marketplace will be built around the notion of maximizing bids for unsold ad space. Down the line, an attempt will be made to buy and sell all ad space in an automated manner.
Once the power of ad serving has been ceded, these brokers of the new millennium will dictate their cut/commission on all digital ad revenue. Isn't this where talks broke down with GoogleTube when they tried to muscle the rules of revenue sharing with the actual producers and copyright holders of the media content?
Data Laundering
Acquisitions of the two largest ad serving companies, DoubleClick and 24/7 RealMedia, gives their new owners access to a treasure trove of vital and competitive data. Imagine GoogleClick owning all of FIM's MySpace data: agency, advertiser, ad impressions served and sold, and dollar amounts of buys. All while FIM is leading the charge with media alliances to counter a GoogleTube monopoly, while its every move is exposed to a direct competitor.
Imagine WPP representing Pepsi and Coke's agency utilizing 24/7 Real Media technology to allocate the sites and buys of a competitive product to WPP's client. Needless to say, it would be very tempting to take a peek or -- even worse -- use the data to your competitive advantage.
Organized Profit
The days of product management and client services in the interest of the customer (either publisher or agency) are over. All features and offerings will be in the interest of the new owner's pocket, no longer the technology platform customer. The concept of customer will vanish into being an element of a vast network.
Big media companies on licensed versions of DoubleClick or RealMedia will be left out in the cold since these products are very likely going to be phased out, given the whole point and value behind these acquisitions is amassing the data for owners to decide how best to profit. The integrity of every ad impression served will also be called into question. Brand publishers will continue to sell their own space via sales reps without a doubt for the next 5+ years.
Is your system serving each impression you sold in your interest or is the ad serving algorithm biased towards picking a campaign that will benefit a big corporate owner? A very concerning and rude awakening of what's behind these multi-billion dollar bets will be on the minds of the major stakeholders of digital advertising revenue.
Protection
Once you've turned over control of your revenue-generating system, you will need to pay for protection. There are plenty of imaginable circumstances and many that will unfold over time. Isn't this what GoogleTube is attempting when they will only provide available content filtering technology to protect partners?
Outcome
Big media will look for independence and offset the endless appetite of these would-be dominant forces in online advertising by using their own or independent ad management technology. Isn't the Checks and Balances system what makes the American democratic system so great? Imagine the inverse: blank check, no balance!