Six Pixels of Separation - The Blog
April 17, 200711:09 PM

Google Buys DoubleClick - Is Banner Advertising Making A Comeback?

"Don't call it a comeback... I've been here for years." (can anyone name this lyric?). I could paraphrase the online advertising news item that shook the online marketing industry to its core last week, but I liked the way MediaPost states it in their Just An Online Minute... email blast:

"Ending weeks of a bidding battle with Microsoft, Google reached an agreement to buy online advertising network DoubleClick for $3.1 billion in cash, the companies announced today... The deal expands Google's foothold in online advertising. The price is almost double the $1.65 billion Google paid for YouTube last year. DoubleClick, founded in 1996, provides display ads on Web sites. The deal gives Google access to DoubleClick's relationships with Web publishers and advertisers. Perhaps equally important, it keeps them away from Microsoft."

A little background to get us all on the same page: I was working at one of the only meta search engines back when DoubleClick first started and the Google guys were still in University without a beta site in sight. To this day, I am a huge proponent of DoubleClick's DART ad serving technology (which has become the industry standard) and I've seen DoubleClick go through some turbulent moments. This deal is well-deserved if you compare it to YouTube, where the video-community was hardly two years old. DoubleClick has been grinding it out since day one and, as we all know, it's not like clickthroughs on banner advertising has been impressive.

This is a good deal for both Google and DoubleClick on many levels (beyond the obvious financial windfall). It's a not-so-great deal for Google competitors, Microsoft and Yahoo! At this point, Google will own many of the channels to online advertising and could relegate companies like Yahoo! and Microsoft to their own garden walls.

I guess the biggest quandary is why? Google re-invented online advertising with their targeted and contextual keyword programs as more and more consumers were installing pop-up blockers and completely ignoring most banner ads. It seemed to me that text ads were a direct reaction to annoying banner ads. Current banner ad statistics look almost as abysmal as TV ads for people with Tivo or PVRs.

I don't think Google bought DoubleClick just so that Microsoft couldn't. Much in the same way we're not seeing that much action on other Google acquisitions like Dodgeball, YouTube or Writely, I have high hopes that Google's strategy team is simply working acquisitions that act like pieces of a puzzle that the general public (yup, you and me) can't yet see.

Online advertising is not going away... in fact, the exact opposite... it will continue to grow. I think the big question is whether or not Google will use DoubleClick's technology to continue serving display ads or if there's a grander picture in place for where online advertising is going?

We questioned the text ad strategy. It works. The acquisition of DoubleClick opens up many roads of online marketing discovery for Google. My guess is that we'll all be pleasantly surprised when Google shows us why they bought DoubleClick and how online advertising can be effective (maybe even by using banners).

By Mitch Joel


Comments Comments Feed
  • Posted by Sulemaan
    Mitch Joel

    1. "Mamma said Knock You Out" LL Cool J

    2. My preferance is SEM vs banner ads in terms of ROI from a client-side perspective.

    3. If Misters Page & Brin ever consider as CPA model for banner ads like they are currently beta-testing a CPA model for SEM south of the border both Mr. Ballmer and Mr. Semel may be in tough.

    Reply
  • Mitch Joel

    Mitch,

    I've heard countless Internet experts blaming banner advertising (at least partly) for the dot-com bubble bust.

    In my mind, it wasn't the banner ads that failed but the people (and companies) who managed them. For visual people like me, banner ads (even if it's not targeted) will always be more appealing than text ads (especially for things like travel, cars, restaurants, etc.) Especially when they are interactive.

    When Google announced the introduction of image (banner) ads in their AdWords program did experts continue to be so vocal about banner ads? No. Because it was Google. And because a lot of agencies are thriving today thanks to Google.

    With regards to the DoubleClick acquisition, what I'm curious to see is whether Google will be making it available to small budget advertisers (part of the reason AdWords has been so successful).

    Correct me if I'm wrong, but DoubleClick has been serving the bigger advertisers and agencies. Google is for every budget.

    Curious to see how this acquisition will unfold.

    Maki

    Reply
  • Posted by Mitch Joel
    Mitch Joel

    Sulemaan - spot on with the music reference (never doubted you ;)

    I don't think anyone is blaming banner ads for the bust - not sure where you got that Maki. The fact is that banner ads are typically bland, dull and intrusive. If they were not, they would be performing a lot better.

    We're Marketers. We need to get better at understanding the channel and then delivering great messages that match the medium.

    I have no doubt that Google is (or will be) doing display ad testing in both CPC and CPA models.

    You can bet on one thing: with a price tag like this, something will work out for them.

    Sulemaan's comment about SEM is also relevant because of "how" people get these ads - they're contextual - based on the individuals search. With the acquisition of DoubleClick, perhaps Google can do the same for display ads.

    Let's hope.

    Reply
Add a Comment

Please complete all the fields below, including the spam filter (to prove you're not a robot).

  1. Fill in your email address to have your Gravatar photo included with your comment.
  2. Please type the word pixels here:
TrackBacks

TrackBack URL: http://www.twistimage.com/movabletype/mt-tb.cgi/1365