Microsoft: Google Is Our Only Competitor in Ad-Platform Game

At IAB Conference, Microsoft Claims Top Spot, but AOL and Yahoo Say They Shouldn't Be Overlooked

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PHOENIX ( -- Given the bid Microsoft made for Yahoo last month, it's not surprising that the software giant's executives believe that when it comes to ad platforms, their only rival is Google. And that's the message they're taking to publishers.
Brian McAndrews: There are only two players who can compete in this space long term.
Brian McAndrews: There are only two players who can compete in this space long term. Credit: Doug Goodman

"There are only two players who can really compete in this space in the long term," said Brian McAndrews, Microsoft senior VP-advertiser and publisher solutions, to the crowd of 400 gathered for the first conference organized around the Interactive Advertising Bureau's Annual Meeting. The space he was speaking about is that of an end-to-end ad platform -- an integral part of today's web.

Mr. McAndrews later told Ad Age that companies shouldn't get too rankled over the prediction; he wasn't saying there would be only two major online-advertising companies around five years from now. But AOL? Yahoo? "They won't have all the components of an ad platform," he said. "I'm certainly not saying Yahoo, AOL are going away. ... But I don't see [them] competing against Atlas and DoubleClick."

Total package
In Mr. McAndrews' vision, the demand for inventory -- marketers, agencies and agencies' ad-serving systems -- sits on one side of the platform. On the other side sit supply-side sellers -- the publishers and aggregators of online inventory and their ad-serving systems. In the middle sit ad exchanges, which pair the right ad with the right impression, and networks, which work to convert inventory into value for publishers and advertisers. There'll be companies that can do some of these things, he said, but only Microsoft and Google can do them all.

"It's incredibly expensive. You need a very large data-warehouse system to collect that data, use that data, process the data," he said.

Yahoo is hoping to be there -- as long as Microsoft doesn't swallow it. In his IAB speech, CEO Jerry Yang, who brought along surprise guest President Sue Decker, said Yahoo has developed an advertiser-publisher exchange called Apex. Ms. Decker said it will come out in "multiple releases over many years," with the first releases in the second half of 2008.

"Publishers have unbelievable inventory that they're selling directly," she said. "But they're running out of inventory. ... Imagine if they could not only sell their inventory but Yahoo's similar audience inventory or other publishers' inventory."

'At their own peril'
AOL CEO Randy Falco wasn't happy with the implication that only Microsoft or Google would have the tools to provide an end-to-end online ad platform.
Yahoo's Jerry Yang and Sue Decker
Yahoo's Jerry Yang and Sue Decker Credit: Doug Goodman

"We have Platform A, the largest ad network in the world. Microsoft and Google can ignore us and leave us off of charts if they want, but they do that at their own peril," he said.

One troubling aspect for many publishers was the feeling that the platforms, by offering such automated approaches to buying, selling and optimizing inventory, are commoditizing it -- and that the selling system is being broken off from the content side of the business. Wenda Harris Millard, head of media for Martha Stewart Living Omnimedia, said she didn't want to trade ad space "like pork bellies," a line that was referenced throughout the conference. Jim Spanfeller, CEO of, moaned that exchanges disassociate the inventory from the content provider. "That's probably not a great place for the end user or publisher and probably not for the marketer."

Added Rob Norman, CEO of Group M Interaction: "Anyone that tells me media and marketing is only a math problem is not going to get much time from me."
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