Google Long Term Enemy of Advertising Agencies
Posted under Electronic Marketplaces

Sir Martin Sorrell, the WPP Group chief executive, bills in excess of €40 billion euros in advertising and marketing services. His views of the doubleclick acquisition are understandably apprehensive, he states
"It's going to be very interesting to see how it shakes out. We buy about $200m of their media and that's up from about 150m last year. Google is a short-term friend and a long-term enemy and probably the shorter term just got a little bit shorter and the longer term got a bit closer as a result of the DoubleClick acquisition,"

"It raises issues as to whether we are happy to let Google have our clients' data and our own data, which Google could use for its own purposes in contextual and targeted advertising."


Doubleclick is one of advertising agencies preferred banner campaign management tools. Its software pioneered the start of banner advertising in the late 1990s. Its current DART version, which we use at Enclick and Hispavista, allows advertising managers to optimize banner servicing per a demographic and per user.

Doubleclick also provides value-added services like email marketing and search engine marketing, ppc and data feed campaign management. Essential value added services for marketing agencies.

Though Doubleclick also offers its own in-house marketing agency service, it has nowhere near the level of threat and reach of Google's Adwords advertising. Google has deftly acquired one of the top online advertising management tools. With Google's clear intent to dis intermediate the online advertising value chain, the Doubleclick software is now a sword hanging over the inefficient advertising agency market.

Google can now clear a path for merchants to plan, deploy and manage the lucrative CPM-banner advertising, directly onto publisher websites, just like Adword campaigns. The move is inline with Google intention of creating a transparent and efficient advertising marketplace.

Unfortunately, as with much of the search engine marketing, this largely bypasses the advertising agencies, leaving them without the high-margin brand-CPM campaigns. Nevertheless, Google is disingenuous in denying the increased conflict; Dennis Woodside, the managing director of Google UK, Ireland and Benelux, says

"We are talking about a competitive market. Users have a huge choice about how they search information. There are a lot of ways an advertiser can get out to market. There's nothing stopping them going to any number of online companies.

Yes, the market is competitive, but if Google offers the Doubleclick services for free like its Urchin/Analytics, the market just got a hundred times more competitive for advertising agencies. The market will become a lot more transparent; the end-of-year kick-backs that publishers must pay advertising agencies to be included in their media buying might disappear altogether.

[Via Google is a long-term enemy says Sorrell - Brand Republic News - Brand Republic]

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