Search News: Google Spreading Tentacles Wider into Ad Exchanges?

Rumor has it that in the near future, possibly within the next two weeks, we may see Google’s invitation only DoubleClick ad exchange marketplace door swung wide open to all buyers and sellers.  This is according to ClickZ, but as such it’s still only rumor. As Mia Wallace said in Pulp Fiction “When you little scamps get together, you’re worse than a sewing circle.”

Still, assuming it’s true; Google could bring the worlds of search and display marketing closer together than ever and finally impose tools and measurement on display that we’ve been using for years in the search marketing field.

For those search marketers out there that are unfamiliar with ad exchanges in the display advertising space, in effect they are a support structure for the sale of undervalued, unused or remnant banner advertising inventory.

The benefit to the seller (often a publisher or site owner) is that they are inherently guaranteed that their impressions will be sold for the highest bid price above a pre-defined and benchmarked reserve. This ultimately allows them to monetize inventory that otherwise would have gone unsold by their sales staff or partners.

For buyers the benefit within the ad exchange model is the ability to supplement their online campaign media mix while enjoying low priced impressions at high volume.  This is also beneficial to smaller advertisers seeking volume with relatively lower available budgets compared to bigger players.  In some cases, and based on the CTR of the ads, the net/net of the CPCs within remnant inventory can prove cheaper than that of slightly higher quality placements within direct or network buys (depending on the ad serving platform and optimization strategy).

Currently Yahoo’s “Right Media” exchange is the leader.  Google believes that it can close the gap on already established Yahoo by leveraging it’s already highly robust and accurate content and placement targeting algorithm solutions.  With the ability to target an audience to the tune of 80% Global penetration – I’d say they have a pretty good shot at it.

Here’s a few reasons why:

1.       Google’s advanced technology and leadership in the bid algorithm optimization and contextual mapping space. Having already extensively categorized partner’s websites they can apply the same methodology to display advertising essentially allowing them to easily slice and dice inventory.

2.       Possible Integration with Google’s AdWords system. Full integration of display and search within the AdWords platform could allow users to make on-the-go adjustments to campaign performance.  Marketers would be able to see how lift in search/display impact one another more clearly and quickly.  This would assist in decreasing Display advertising waste that may not align with planning or traffic trends.  It would also align the two mediums to collectively respond to high performing message themes more rapidly.

3.       Google’s search leadership would allow them to funnel new customers into display that may never have tried it.

4.       Google’s Global Reach

5.       The possibility of free analytics and reporting

6.       Free Conversion tracking/optimization offerings. Google’s auto-optimizing features have allowed even the most novice advertisers to get in the game comfortably. Expanding these tools to display should have a similar effect.

The far-reaching effects of these moves, were they to happen, are substantial and could set the stage for Google to dominate yet another online advertising medium.

Take, for example, search re-targeting (which Reprise Media VP Dan Kashman will be moderating a panel on during Advertising Week – shameless plug alert!) -  if Google couples the re-target efforts in display with their extensive search and contextual trends data , they will have a very compelling offering to advertisers that want to bid on remnant inventory.

If they allow ad networks to optimize the categorized inventory they buy at a bargain, they can essentially micro-target already targeted ad space to increase CTR. This could allow for the kind of cost-effective long-tail niche marketing in display that search already excels at.

In addition, the larger Google’s ad exchange gets, the larger the display reach will get in addition to the ability target a consumer more than once within a given 24 period (frequency). If Google overlays the categorization with extended reach/frequency, they can help advertisers run successful click based advertising at a relatively low CPC.

Google stands to gain from the increased/expanded ad exposure and monetization dominance. It will be very interesting to see how the Government reacts to this obvious move to establish a greater digital prominence outside of Google’s core business.

As search marketers we need to be cognizant of paradigm shifts in integrated marketing strategies.  With each year that passes and each new innovation towards standardized KPI’s and cross platform tracking comes the need for folks to become digital marketing professionals and specialists rather than silo-ing themselves into one medium or another.  In lieu of that I think as search marketers we have an advantage – the innovation on other platforms is all serving to move them towards tools and measurement we are already very familiar with.