Google Buys a DSP, Extends Dominance

Yesterday, Google announced their purchase of Invite Media – a move that has the industry buzzing.  You can already find tons of reaction on adexchanger and other industry news sources…I figured I’d throw in my thoughts on it as well before we head into the weekend and it becomes old news on Monday.

First off- I’m so happy for the guys at Invite.  I want them all to celebrate this weekend.  Hard.  I know their Director of Business Development- Nik Dixit- already has plans to go salsa dancing this evening with his girlfriend and her friends.  Yes!  Now that’s what I’m talking about…

I’m loving all of this stuff that’s coming out about Nat too.  He deserves the recognition he’s getting.  So young, so smart- and a helluva nice guy to boot.  But what’s crazy is the whole company is like this.  Zach, Scott, Michael, Dave, Geoff, James, Nik…. all under 30- all brilliant, hard working folks.

Nat Turner: Young Money Millionaire

If this move doesn’t completely validate DSPs and RTB, I don’t know what will.  Quick alphabet soup lesson for those that aren’t privy to these acronyms:

DSP = Demand Side Platform. I define a company as being a DSP if they a.) only focus on media buying/not on selling, b.) align themselves with national agencies/”premium” advertisers only, c.) offer a unified interface (“platform”) that allows a media buyer to manage campaigns across a variety of supply sources (large websites, exchanges, publisher aggregators, etc.), d.) do RTB

RTB = Real Time Bidding. I like Neal Mohan’s definition- “[RTB] enables advertisers and agencies to tailor their bids on an impression-by-impression basis, based on their own data, when bidding on websites that choose to make their ad space available through an advertising exchange.”  The key part is the “based on their own data” part.  To be a true player in the RTB space you are able to a.) collect and process a ton of data (user behaviors, history, IP, time of day, contextual relevance, search queries, etc.) extremely quickly and b.) use this data to make your own media purchasing decisions (“bids” in an auction like exchange environment).  It requires a lot of infrastructure and engineering.

Google buying Invite basically puts the industry stamp of approval on RTB and DSPs.  Not that anyone really feared RTB and DSPs weren’t the way to go- it’s just comforting to get the validation from the king of the castle.  Same thing happened 3-4 years ago when Google, Yahoo, and Microsoft bought up all of the exchanges…

So the question I’m asking- will this spark the next “arms race”?  Is this history repeating itself?  Who will be the next DSP to be acquired- Turn?  Media Math?  X+1?  Is $70 Million too high a price tag?  Too low?  I guess we will have to wait and see…

One thing’s for sure- Google isn’t waiting for anyone.  Having already conquered search, it’s now time to take down display (and mobile and TV while they’re at it- world domination style).  The company keeps making acquisitions to propel them to be the industry leader in display advertising- not just a player.  Google’s Doubleclick for Advertisers (DFA) platform already seems to be the industry standard for media buyers executing traditional display media buys.  With the plan to integrate Invite into DFA, an online media buyer will soon have everything he or she needs in one hub- a single platform to facilitate both traditional and next generation media buying.  As Mohan points out:

We’re going to continue to invest significantly in improving Invite Media’s technology and products as a separate platform and, in time, make it work seamlessly with our DoubleClick for Advertisers (DFA) ad serving product. DFA enables advertisers and agencies to effectively plan, target, serve and measure display ad campaigns across the web. Integrating Invite Media’s technology will help DFA’s clients to easily buy ad space across multiple ad exchanges, as part of managing their broader display ad campaigns. Invite Media’s platform will of course continue to be available to any agency or advertiser, whether they use DFA or not.

And when Google says “seamless”, they mean it.  Over the years I’ve been impressed at how they’ve been able to layer on their additional products without skipping a beat.  For example- as a long-time Google Adsense account holder- I woke up one day and magically had access to Doubleclick for Publishers (DFP) without even asking for it.  They had sent me an email saying “you don’t have to do anything” and it was 100% right.  Using the same username and password, I logged in with a breeze and could instantly take advantage of Adsense in the same ways I had been- only now I have the benefits of a more robust ad server and additional functionality. I bet the same thing happens with DFA/Invite.

Media buying just got that much easier.