Last week it was confirmed Google purchased Invite Media; a DSP start up that has RTB capabilities for advertisers/agencies to buy from several ad exchanges and spread their ad dollars across numerous websites that are chosen using optimisational methodology using Invite Media’s predictive algorithm. In plain english it’s a user interface to buy inventory that makes ROI sense for every advertiser that uses the Invite Media platform.
Many of you have sent in requests asking for my opinion especially in line with the APAC markets:
It is a wise move by Google to purchase the most prominent and leading DSP in the display space. However wise moves are measured by the successful integration between Doubleclicks DFA platform which it what Google will ultimately want although invite for now will remain standalone. After all, why build a new technology if you already have a company that has done a decent job and instead buy the company and integrate it with your current offerings. I think Invite’s RTB technology works well and Google wants to leverage it to build a more scalable model that will eventually according to adage ‘ make display more like search’.
A DSP should be agnostic – so essentially Google acquiring Invite in my belief is an oxymoron to the essence of a true DSP. Where is there true neutrality when you have a company that has to preserve its publisher goals before its advertiser needs. Indeed there was great controversy when Yahoo bought Right Media and the education in preserving RM’s neutrality was not easy in such a marketplace rigged with beliefs contrary to that. However RM did it and essentially the conflict of interest with Google also could be argued away. The challenge this time around is that Google has a monopoly in search and its purchase of Doubleclick essentially bolstered its display penetration enormously. Once you have such deep penetration in display and search the competitive edge is lost – then of course you bung in admob and youtube and you have a one stop shop ruling the world.
What does the sale of Invite mean to other DSPs?
Who knows –but in my mind many DSPs were born out of the desire for a buy out and if other DSPs are sold for a much lower price than the 70M reportedly made for Invite (remember Invite is said to be one of the better DSPs out there) then there is a serious bunch of VCs out there trying to work back on their ROI. Its going to give indication that some DSPs might dry up and die a cheap death, some may cut short their desire to become a DSP or take the opposite angle and start adding serious value to their offering in hopes that Microsoft, AOL and Yahoo will go out and shop for their own DSP offerings and bid up. So hopefully this move by Google will actually shake out the worthy DSPs from the rest of the marketplace who are claiming DSP status and bring about a more efficient environment rather than more fragmentation where we are seeing some networks morph into DSPs only for survivals sake rather than the higher road of efficiency.
If anything Google competitors will start seriously factoring in their needs in this marketplace and provide more insight and strategy into their interplay in this landscape.
What does this mean for APAC?
Well it depends on a country by country level – Australia is probably going to see the greatest swing into this area of DSPs especially since Google AdX was released again in Australia early this month. Large DSPs in the US have been thinking of International as their next growth strategy and that often means EMEA (more Europe than MEA) and as Australia tends to flow in line with the UK. Australia has a wealth of ad networks who will be concerned about the growth of ad exchanges and those who are not in bed with one will want to court one soon. It’s the survival of the fittest.
No one should jump in without thinking thoroughly about their true needs in targeting, inventory sources, ROI and its ability to predict inventory that hits the best optimisation needs for their campaign. Ad exchanges are blind to some degree as the trade off is essentially price sensitivity. Australia is very brand sensitive so ad exchanges have had a difficult time in gaining credibility in AU. Once ad exchanges are adopted into the AU marketplace its very much adoption of the DSP or even with convergence occurring at some many levels – we may see AU adopt DSPs and exchanges at the same time.
Singapore and India are the other two countries or hubs that may see some sway in the way ad exchanges are adopted into each value chain. Both have good mixture of performance and brand buys and clients from both countries are looking for more information on ad exchanges and their ability to engage with DSPs.
One thing is clear – the passage of time seen between the ad exchange to the DSP in the US has been in play for some time ( 3 years when Invite was born), the length of passage in APAC looks to be much shorter. If this happens then the evolution between brand and performance ad dollars in APAC is murky – will the brand dollar have a shorter lifespan than the US or Europe did?
Perhaps but ……
Remember e-commerce has been critical in moving the needle from brand to dollar as ROI is a necessary component in any e-commerce ad campaign. E-commerce has been flourishing in Europe and the US – APAC is very different. Here we want to touch our products – it’s a national sport to shop in Singapore and the lack of e-commerce transactions in APAC is fraught with trust, credit card issues and some infrastructure challenges. So whilst AU, SG and IN looks to be the key markets of adoption for ad exchanges and DSPs – the rest of APAC may have some time to go to get to the height of tension seen in the US.