Doubleclick Goes to Google; Media Titans Call It Anti-Trust

Rafat Ali at PaidContent rounds up this weekend’s coverage of Google’s acquisition of Doubleclick:

“Competitors like Yahoo, Time Warner and Microsoft, all of whom did bid for DCLK, are talking about anti-competitive nature of the deal. The deal will be subject to a review by either the Department of Justice or Federal Trade Commission.”

This is the first time Microsoft has called an anti-trust foul on someone else, according to the Financial Times!

I can’t imagine the Justice Dept will stop the deal, but Google, very obviously, is hot to move up-market in the online ad world, and Big Media is terrified. Google currently dominates the bottom, CPC direct response advertising, and in some cases (sites that stick to vertical content categories that are well supported with endemic ad dollars, say enterprise technology or auto-buying news) they perform better than the ad networks that are supposedly a notch above them in the food chain. In other cases (sites with high-quality readers, but broad content coverage) the ad-network model makes more sense and more money for publishers. As Google continues to struggle to get into the high-end brand marketing game, they recognize an easy new market to conquer is the ad-network world.

Doubleclick allows them to take their existing publisher network and plug in graphical ad units, served based on criteria beyond key-word context matching. Presto, they just put every ad network out of business.

This still doesn’t get them into the premium brand-ads business. But it’s the platform they’ll need when they do get there.

In the meantime — call it their “brand advertising market research phase” — they get to see what every advertiser pays for site-specific graphical ad programs. This gives them leverage in negotiating with existing publisher partners. “Hey, NY Times, let’s be honest. You sell 26% of your inventory at an average net CPM of $17. Let us have it, and we’ll do 100% at $6, and everybody wins.”

It’s also good market intelligence they can use to steal advertisers from the direct sales efforts of those publisher partners: “Hey advertiser, I’ll get you on this particular site, dayparted, geo-targeted and context matched…. and I’ll do it for a nickel less than the publishers themselves are offering.”
Scary situation for the media titans. When the anti-trust suits don’t pan out, I’m betting the Google-Doubleclick deal will drive an active year for digital media M&A.

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