Hey, Yahoo, Microsoft, Google Is About to Eat Your Lunch in Display

Alan Pearlstein

The Google-Admeld deal was announced a little more than a month ago, and it was the hot conversation topic in our industry for a while. Now the buzz has died down considerably, and most mentions of the deal center on how closely the Department of Justice will examine it.

Google's Admeld purchase wasn't exactly surprising, and it's probably a smart move for a company with billions of dollars in cash at its disposal. But the dying buzz reflects a much larger problem in our industry. The other advertising and technology players are letting Google make big purchases, and they're failing to respond in any meaningful way that will help them compete with Google in the long run.

By purchasing Admeld, Google is one step closer to putting together a full end-to-end advertising stack that helps advertisers buy impressions in far more efficient fashion. Where are Yahoo, Microsoft, Adobe, IBM, Axciom, and Experian in all of this? The other powerful digital technology companies need to consider getting involved in data, because if they don't, Google will be the only player with a stack that can scale display. Google dominates search practically without rival. You can argue that Yahoo and Microsoft have their toes in the game, but second place in the search game with less than half the market share of the leader is like a baseball team being 25 games out of first place in mid-July. In other words, there's no chance of catching up.

Display is a different affair than search, and with strong growth forecasts, Google has shown an increased interest in this space. It invested heavily in DoubleClick, and last year bought Invite Media to facilitate real-time buying. Admeld gives Google a chance to appeal directly to premium publishers, giving Google access to even more display media, and a lot of branded display at that. If the other big players don't act now, they're going to get pushed aside sooner than they know it.

If any company knows what it feels like to get passed by Google, it's Yahoo. That company made display its top priority, and Yahoo looked ready to lead when it bought Right Media in 2007. Since then, Yahoo has sat and watched Google run right by, even though so much of the inventory bought by Google's Invite Media is on Yahoo's Right Media Exchange. Yahoo has been the slowest of the display superpowers in integrating real-time bidding, which seems absurd when you consider display is its only hope at a future.

Earlier this year, Adobe seemed to take a step in the right direction when it bought Demdex. By folding Demdex's audience management technology into its SiteCatalyst metrics suite, Adobe gives publishers a stack of tools that can measure and monetize site visitors. Purchasing one company that complemented its existing technology essentially turned Adobe into a player in display, not just in back- end or content creation/creativity. The purchase may slow the development of Demdex's technology offerings, but it's a great move from Adobe. However, Google's purchase gives it technology offerings on both the supply and demand sides. Anyone hoping to keep up will need to do both.

At the same time, if Google is making purchases to get closer to advertisers, a big agency like Acxiom needs to follow suit to maintain brand relationships. Even IBM, a major tech company that mostly has stayed outside the digital advertising realm, could become a factor in display by combining a demand-side platform with a few other technology providers.

Offline companies are MIA as well. InfoUSA and Experian have loads of data for direct mail and lead-generation, but they aren't fully invested in digital marketing data, where the data market is just heating up. Google may not be a threat to their businesses now, but there's no reason to think Big G won't explore new revenue opportunities once it has a tight grip on display.

There are whispers throughout the industry about Admeld clients getting ready to jump ship and find new partners, or that Microsoft will take a renewed interest in the space. I sure hope so -- the time is right for any other major display company or technology giant to take on Google. If all the other players in the game sit back and let Google assemble a stack without competition, then they're going to be wiped out. They might not have the pockets, but even Google can't afford every company. Some companies even bristle at the thought of a Google buyout. If someone is going to take Google on, they had better do it soon.