Google announced Monday it’s moved to buy online advertising company Admeld, another purchase in what appears to be the search engine giant’s move toward the display ad market.
Neither company disclosed the cost of the purchase, but reports suggest Google paid about US$400 million to acquire Admeld.
While Google’s ad platform has traditionally consisted more of text and search ads, this acquisition could help the company grow further into display advertising.
Companies like Admeld and competitors such as Rubicon Project or PubMatic are geared toward making highly personalized ad suggestions to consumers by making their ad space available indirectly to thousands of advertisers.
Alternately, organizations like Double Click’s DFP or Yahoo’s APT sell space directly to advertisers, so the likelihood of a consumer seeing an ad that’s directly relevant to them decreases.
There may be much potential for a thriving display ad market, but a lack of understanding of its complicated machinations is holding many publishers back.
Admeld and Google believe that managing display advertising is still far too complicated for publishers, and they hope to address some of the scene’s underlying inefficiencies, said Admeld CEO Michael Barrett.
Google’s goal is to make display advertising simpler and more efficient, and to improve support and services, according to Neal Mohan, Google’s vice president of display advertising.
New Online Ad Territory
Google’s current platforms and infrastructure could benefit significantly from more personalized display ads.
“Google has YouTube and a wide network of sites and technologies where advertisers can interact with consumers. AdMeld provides an innovative platform with features considered to be robust and innovative,” Michael Stanat, research executive at SIS International Research, told the E-Commerce Times.
In an ever-growing online ad marketplace, that interaction and innovation has the potential to attract new consumers, and Admeld is a leader in that field.
“Today’s advertisers have largely gone to online digital advertising. With increased competition, advertisers are looking for optimized results, return on investment and rapid customization of campaigns. Admeld is largely focused in these areas,” said Stanat.
Top of the Field
The acquisition signals assertive steps taken by Google to lead in online ads.
“Google may ultimately win in display, which was unthinkable a few years ago. The company has been focused on it for the past couple years as a major growth opportunity, and buying assets accordingly, DoubleClick, AdMob, Invite Media, etc.,” Greg Sterling, founder of Sterling Market Intelligence, told the E-Commerce Times.
Google’s aggressive approach to expanding its display ad potential has been in the works for some time. In fact, while at the IAB conference earlier this year, Google’s Mohan declared that the online display ad industry would reach $200 billion dollars.
“The number is clearly exaggerated — unless it’s a global figure, but even then — but it illustrates how bullish Google is on the display opportunity,” said Sterling.
The approach is one the company will likely continue to take in its pursuit of online domination.
“Google seems to understand that it cannot remain complacent with being a market leader now. It must continually invest in innovative startups to keep up with rapid development and competition in the online advertising market,” said Stanat.
The companies don’t have detailed integration plans yet, according to AdMeld’s Barrett. Due to the financial scope of the deal, it will most likely have to pass some regulatory hurdles before being official.
“There’s going to be major and extended regulatory scrutiny of the deal — in large part because of its profile and price tag — but it will probably ultimately go through,” said Sterling.