Yankee Google Dandy
The breaking story today that Google is buying DoubleClick is concerning for the short-term with the potential for a told-you-so in the long-term.
Google is the search powerhouse, taking the majority of spending in paid search, the category that is already the largest online spending category. But until now, online display has not been dominated by any one player. DoubleClick may be the biggest when compared to others, but DoubleClick alone cannot control the market on its own like Google could with search. Changing that would be a bad thing.
The reason is that as I've mentioned before, Google's complete lack of transparency in its AdWords product is deceitful. They'll contend that so long as companies can generate a positive return on their investment, it's not important to see the how and why of what's going on behind the calculations. That may be so, but price gouging has never been the foundation of enduring success. Bringing this opaqueness to what is currently a wonderfully transparent category will only frustrate advertisers and stunt the tremendous growth online is currently experiencing.
I personally believe ad networks are a great model for online display, but the biggest complaint against them is the lack of transparency, even if the network offers a fully disclosed site list. For instance, Which sites did your campaign actually run on? What percent of the campaign ran on each site? How did (at least) certain categories perform compared to others? These questions often keep advertisers away not just from networks but online altogether. Despite these concerns online has grown by leaps and bounds in recent years and that growth has been projected to continue. Those projections would change if online display became more opaque rather than more transparent, leaving less questions answered than more.
But why the reference to the Yankees? Well, aside from the short-term monopolistic and transparency concerns, Google CEO Eric Schmidt sure seems to be behaving like the New York Yankee owner George Steinbrenner as of late. You may remember that in the late 1990s and early 2000s George Steinbrenner signed almost every top free agent available with the goal of building the unbeatable team. Of course, for the fans of almost any other team it was just depressing. Who had a shot?
It turned out a lot of teams had a shot. From 1996 to 2000, the Yanks won four of five series. However, despite the highest payroll in MLB, the Yankees haven't won any championships since then. Individually, they have many of the best players at each position. Collectively, they couldn't get the job done.
Google was fantastic at search and built the best search team out there. With YouTube and now DoubleClick, the executive team's focus keeps getting divided. While it seems like Google is building an empire, this might just be the beginning of their end.
Google is the search powerhouse, taking the majority of spending in paid search, the category that is already the largest online spending category. But until now, online display has not been dominated by any one player. DoubleClick may be the biggest when compared to others, but DoubleClick alone cannot control the market on its own like Google could with search. Changing that would be a bad thing.
The reason is that as I've mentioned before, Google's complete lack of transparency in its AdWords product is deceitful. They'll contend that so long as companies can generate a positive return on their investment, it's not important to see the how and why of what's going on behind the calculations. That may be so, but price gouging has never been the foundation of enduring success. Bringing this opaqueness to what is currently a wonderfully transparent category will only frustrate advertisers and stunt the tremendous growth online is currently experiencing.
I personally believe ad networks are a great model for online display, but the biggest complaint against them is the lack of transparency, even if the network offers a fully disclosed site list. For instance, Which sites did your campaign actually run on? What percent of the campaign ran on each site? How did (at least) certain categories perform compared to others? These questions often keep advertisers away not just from networks but online altogether. Despite these concerns online has grown by leaps and bounds in recent years and that growth has been projected to continue. Those projections would change if online display became more opaque rather than more transparent, leaving less questions answered than more.
But why the reference to the Yankees? Well, aside from the short-term monopolistic and transparency concerns, Google CEO Eric Schmidt sure seems to be behaving like the New York Yankee owner George Steinbrenner as of late. You may remember that in the late 1990s and early 2000s George Steinbrenner signed almost every top free agent available with the goal of building the unbeatable team. Of course, for the fans of almost any other team it was just depressing. Who had a shot?
It turned out a lot of teams had a shot. From 1996 to 2000, the Yanks won four of five series. However, despite the highest payroll in MLB, the Yankees haven't won any championships since then. Individually, they have many of the best players at each position. Collectively, they couldn't get the job done.
Google was fantastic at search and built the best search team out there. With YouTube and now DoubleClick, the executive team's focus keeps getting divided. While it seems like Google is building an empire, this might just be the beginning of their end.
posted by Jay Friedman - Goodway 2.0 @ 4:14 PM
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