Reaction seems to have been fairly mute, given responses to articles such as Robert Hof’s Business Week piece. Or maybe we all just knew it was coming, so we left the streamers and poppers in their box. Given Google’s proximity to Apple, they should learn to create a little surprise, shock, and awe – nothing rocks like a Jobs keynote, followed by a Mossberg ‘here’s why it’s too cool’. . .
But for most, the ad exchange is evolutionary, not revolutionary. We’ve had new types of buying platforms emerge, from Adbrite’s approach, to Right Media’s model that allows greater flexibility. The hope that Google’s entry will enfranchise the long tail, make this easier ,and thereby create competition appears to be a solid rationale. Just as there was Search before Google, so there was Display before them too.
However the fundamentals are a little different to make Display work with same ease as changing the user interface, or the economics of buying by click. Search works well because there are relatively few moving parts to the puzzle, and we are dealing with a fairly self-selecting bunch. In the funnel of customer purchasing, we are down somewhere between knowing I have a need or interest, and about to take action. If I search “Flights to Cancun” I am either interested in flying to Cancun or a plane-spotter (where’s my anorak?).
Display demands we deal with more numerous levers than simply creating engaging words that snag pre-qualified users. To do Display well, we need to understand oddities such as reach, frequency, message optimization, etc. We’re also dealing with users in different states within our funnel, where awareness and interest are as important as action and need. However, the table stakes for awareness and interest are a lot higher, and the distance from awareness to action a lot longer. This is one where time is money, and how long or patient the long-tail is, remains to be seen.
Google’s advantage is it knows how to simplify this type of management so it’s not onerous for the user to manage and operationalize. Whether an exchange is the right vehicle for it remains to be seen. It certainly won’t be a boring few months with Microsoft and other players emerging with their competitive solutions.
– Martin Smith
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