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Over the last few months we’ve seen consolidation within the ad serving industry with to date over $11 billion being spent. First there was the Google acquisition of Doubleclick, followed by Microsoft, Yahoo and most recently we reported about AOL’s purchase of TACODA. What does this mean to the advertising industry? In a new feature here at Profectio called “Industry Opinion”, we approached a few seasoned industry people to get their take on what is going on in the ad serving industry and its impact on the bigger picture. In our first of this feature Ted Boyd, Partner, 58Ninety Inc. and Collin Douma, Radical Trust were to share their thoughts.

Why is the consolidation with ad serving companies happening now?
Collin - Advertisers and consumers are getting fed up with ineffective media and poorly sourced e-mail lists. The promise of connecting an ROI to a media buy will raise eyebrows in an industry hungry for optimized media distribution. It remains to be seen if Datran can truly deliver on their promise, but it does put them in the radar as one to watch.
Ted - A lot of the smart money has been sitting on the sidelines until recently. The gold rush may actually be sustainable now that serious money is increasingly moving into the channel. Bigger players are moving into stake their territory and the money that is being invested will help alter and evolve existing business models. In the late 90’s, it was often unclear why certain acquisitions were made from a strategic viewpoint. Now it seems larger players are analyzing their online presence and looking to see which companies make an attractive partner from a strategic and integration point of view. The acquisition of MySpace really began this process in more recent times and the Microsoft’s and Google’s of the world have now started to open their purse up a little more aggressively.
Is there a benefit to advertisers?
Collin - I would expect the learning here may soon be applied to other media channels, many of which are in greater need of this type of solution.
Ted - This industry needs more consolidation. Quite frankly anyone can open a digital agency, but in the context of media outlets, particularly as it relates to the online world, what we need is standards and cooperation amongst the bigger players. Consolidation should mean that we’ll nail standards more quickly; assisting in the development of better creative that can be distributed more broadly. This will lead to a better business case for agencies to make with regard to the development of Online creative. Ultimately, this is what is required for continued investment by advertisers.

How has it impacted your business?
Collin - Either way, a guaranteed ROI on a media buy may soon be standard as technology evolves to enforce accountability.
Ted - We don’t plan or buy media, but rather work closely with media specialists as partners. What we hear from them consistently and agree with, is that the client’s best interest is served using a 360 degree approach with the creative idea driving both the platform and executional plan, not the inverse.

These are exciting days to be in this business.

Categories: Features, Industry Opinion