ContextWeb's Internet Advertising Blog

It’s the Third Party Ad Serving, Stupid

You would be hard pressed to find a Wall Street analyst that does not exude love and affection for Google. But, perhaps if you put a couple of them in Guantanamo-like conditions, they might say they would like to see Google have a path to more brand advertising dollars.

A key to success in unlocking brand advertising dollars in ContextWeb’s view:

Third Party Ad Serving

We were the first to market with a third party served contextually targeted graphical ad product for the agency market.

Give the leading advertising agencies—OMD, GroupM, Beyond Interactive, Publicis, Starcom, Carat Fusion, etc.—the ability to use third party ad serving on your network. These media planners and buyers need to look at client campaigns holistically and need more tools, not fewer tools to manage, add, cut and measure their brand advertising media spend.

Yesterday, at the Bank of America Technology Conference, ex-Mary Meeker compatriot and BofA analyst Brian Pitz handled a Q&A with Tim Armstrong, VP of Ad Sales for Google, where Armstrong was asked if Google’s failure to support third party ad serving has limited its traction with brand advertising.

It sounds as if Armstrong is saying daddy knows best:

“I think we face the same issue specifically in 2000 and 2001 [with] search. I think if this conference were in 2000 and if this were [an] advertiser room, I think one of the big questions we would have gotten back then was, why weren’t we taking third-party ad serving to serve search?”

I’m not sure how you compare third party serving in search—a new market in 2000 and driven by direct response—with brand advertising, an entrenched multi-billion dollar market controlled thru Omnicom, WPP, Interpublic, Publicis and the largest ad holding companies in the world and served, almost exclusively, thru DoubleClick’s DFA and aQuantive’s Atlas third party ad serving products.

Seems different. But wait, there is more:

“And, so there are few different reasons and one is that basically with the third-party ad service, the person is in charge of targeting. So, the assumption’s there [are] that the inventory that you have, a third-party is going to be [able] to figure out how to use that inventory more effectively than you are for an advertiser.”

OK, someone tell me I’m wrong, please. Seems like Big Daddy G is saying it knows how to target the brand advertising better than the advertising agency (“the third party ad service, the person in charge of targeting”).

That’s funny, we have always thought of advertising agencies as customers and partners… Our M.O. says the ad agency needs the control and the holistic view to do the best job for its customer, the advertiser. Looks like the uneasy bedfellows of Madison Avenue and Google are bound to continue.

For the record, here is the Q&A on third party ad serving from the CallStreet transcript.

<Q>: And, you reported that you are not seeing a same type of traction branded as you do in search, mainly because you are not supporting third-party ad servers, can you talk about, is that really limiting your efforts there?

<A – Tim Armstrong>: Yes. We are like historically a third-party ad serving as a process that advertisers use, basically to sort of aggregate their spending and use one ad server to serve up to multiple properties. I think we face the same issue specifically in 2000 and 2001 was search. I think if this conference were in 2000 and if this were advertiser room, I think one of the big questions we would have gotten back then was, why weren’t we taking third-party ad serving to serve search? And, so there are few different reasons and one is that basically the third-party ad service, the person in charge of targeting. So, it’s the assumptions there that the inventory that you have, a third-party is going to be how to figure out, how to use that inventory more effectively than you are for an advertiser.

And, on the long haul, one of the things that ended up being a positive thought in terms of doing search serving ourselves was, that we are able to use all of the inventory. So, if you would take a bucket of 100 impression and use the Google serving system to look at those 100 impressions versus potentially a third-party to look at those 100 impressions, you might drastically reduce the bucket of inventory down with the third-party ad serve down to 50 impressions laid out of the gate, because they would have some rules that would drop the inventory down.

On the Google system, we’ve come up with the way to basically use as much of that inventory as possible, which is good for us and it’s good for partners and we happen to be serving on partners site, it’s one f the reasons that Adsense has grown so quickly and it’s good to the advertiser. So, I think we have been happy with our decision in search, not to be a third-party. I think in the branded ads space, I think that third-party ad serving is the factor of standard just like it was when we launched the search ads program. And, I think, we are currently, I think working diligently in the brand ads space to basically continue to develop our serving capability to serve brand out to the measurements and inventories that I talked about before.

I think, again from an outside perspective, if you look at Google and say, “How is brand ads have grown really, slowly?” I think if we looked at it internally, we have fairly, heavily engagement from some of our largest customers and then — and I think, Google would be a pretty substantial branded ad site on the web if you compared it to revenue numbers. So, I think we’ve been happy with the progress. We love to go faster of course, but I think we specifically want to do the same thing we do in search the brand, which has improved the user experience, improved the advertise experience, and help publishers do better yield management.

-- Jay Sears

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