Google buys DoubleClick for $3.1BRemember that old ad for Recess Peanut Butter Cups? The one that started, "Hey, you've got chocolate in my peanut butter ..." Well, here is the latest digital combinational flavor for you to try: "Hey, you've got direct response in my branding and display." ... "Oh yeah, well you've got branding and display in my direct response."
Beating out several other suitors (including the
rumored $2B bid from Microsoft), Google has aquired DoubleClick for $3.1B, almost double what they paid for YouTube just a short while ago.
There are many unanswered questions about the deal, but one thing is certain: This is an incredible purchase which will fundamentally change the way marketers approach online advertising.
In essence, Google can now manage the ad buy from start to finish. The benefits for advertisers are pretty clear: Google can now offer both direct response (text ads) and branding or experiential digital communications (banners) on a large scale.
It is the first time that one company can make such a powerful and combined offer, and as Fred says in a very informative post, "
The banner is back."
Many marketers have reached the point that they can't easily buy more search. It's getting harder. Keyword markets are becoming efficient and supply and demand are coming into balance. Of course, that alone doesn't mean that all the other money will move into banners. Banners also need to produce measured returns.
But, banners carry branding value that text ads don't. The return on investment measure is not as cold and hard with banners. And the big branded advertisers that are leaving TV and print in search of better performance on the internet want to be able to brand with their ads. And they want to control where those ads are run. They'll pay more for those two features.
They've also bought themselves one hellofa network of contacts.
“Google really wants to get into the display advertising business in a big way, and they don’t have the relationships they need to make it happen,” said Dave Morgan, the chairman of Tacoda, an online advertising network. “But DoubleClick does. It gives them immediate access to those relationships.”
Add to that their probable intent to create an online auction system for ad space as well as their efforts to move into offline advertising as well, and you should begin to see the size of what is being created here.
In addition, The wealth of data that Google has aquired (10 years of click data, amongst others) should not be undervalued.
Amongst many
others, here are a few folks worth checking out for some more insight and information about the deal:
The New York Times,
Official Google Blog,
John Battell,
Steve Rubel,
Michael Arrington,
Fred Wilson, and
Business 2.0.
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