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Give Me Your Data, Said the Spider to the Fly

By - August 27, 2009

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Very interesting news yesterday about Google Adsense and competing ad networks. From ClickZ:

Google plans to open its AdSense network to other ad networks, potentially giving the already huge ad net access to display ads flowing through countless other networks. The firm yesterday said it will allow networks to bid via auction to have their ads appear on AdSense partner sites, like an exchange. Google is vetting several ad networks for certification, but would not name any of the networks. If accepted into the program, the networks would receive payment if their ads win the auction to appear on AdSense sites. The firm said networks will be able to target contextually or by placement. The company suggested the offering will help boost publisher revenues by increasing competition for ad placements.

Now this can be seen a number of ways. First, is this an admission by Google that they do not have good enough display advertising inventory and/or relationships? Maybe, maybe not. Seems to me more of a statement that Google considers Adsense more of a platform for advertising, rather than a network into itself. Second, if you ran an ad network, would you want to do this? Well, ad networks tend to optimize for the most money. If Adsense gives them more money, they just might want to do this. Third, what about the data? Google will learn an awful lot about what is going on with each network once they plus themselves into the Adsense hivemind.

And in the end, isn’t that what it’s all about? Remember what happened with search? AOL, Netscape, Yahoo, and many others fed the Google search beast until Google had all the data and therefore the best search engine. When it came time for renegotiation of those search deals, who had the upper hand?

It’s all about the data, to my mind.


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6 thoughts on “Give Me Your Data, Said the Spider to the Fly

  1. preetam mukherjee says:

    Aggregation + Distribution(aggrebution??)

  2. Interesting this helps to better explain Google AdPLanner. Currently you can’t buy advertising through Google AdPlanner. The AdPlanner currently serves as demographic information of websites. But now, if ad networks and sites are sharing demo info with Google that will make for a very powerful advertising solution.

    Also will help Google to compete with the information that Facebook has on it’s pay per click advertising model.

  3. Zach says:

    Good to see you blogging again John. The key to understanding this is real time bidding through their Ad Exchange. Google is hoping to make display work like Adwords with as many bidders as possible for each impression. More bidders will raise the price on each impression and make Google more money. Since the Adsense tag is on every chain out there, they instantly have the biggest display exchange in one move. It is a really big deal.

  4. Zach says:

    Good to see you blogging again John. The key to understanding this is real time bidding through their Ad Exchange. Google is hoping to make display work like Adwords with as many bidders as possible for each impression. More bidders will raise the price on each impression and make Google more money. Since the Adsense tag is on every chain out there, they instantly have the biggest display exchange in one move. It is a really big deal.

  5. John, how exactly will Google learn anything about competing ad networks? If anything, the other networks will now be able to look into the full range of AdSense’s depth and breadth. AdSense represents the cheapest form of breadth advertising on the planet, and any network should be able to work the arbitrage in their favour with the clients.

    Most ad networks already buy from other ad networks to expand their reach, so what’s the big deal? It is not an exchange because Google is not looking to put ads into the other networks’ inventory. So, I ask again, what’s the big deal?

  6. John says:

    @Sumant – It strikes me that given Google runs the auction and certifies the networks, it gets to see which networks do better and worse. I can imagine some of the data that Google gets to see includes clickthrough, price, which advertisers buy with what networks (competitive advantage), revenue, ad performance, creative rotation, etc. The more it sees, the smarter it gets about how to sell directly to the same clients ad networks are selling to.