Rejecting a looming online advertising monopoly

Sometimes disruption can be taken too far. Unfortunately, it often is as a company grows and looks to adjacent markets to grow further. Such is the case with Google and its recent entry into the ad-management market. TechCrunch rightly opines:

It's yet another example of Google knowing no bounds in its quest to know everything about every person and site.

This is good and provides customer value...to a point. But it's starting to sound an awful lot like Microsoft's voracious appetite on the desktop.

Why should publishers care? Because it makes Google their biggest competitor and stifles competition, as open-source ad-serving company OpenX notes:

With the announcement today, Google now becomes three things to a publisher:

• Ad Network provider (supplier of advertisers)
• Ad technology / analytics provider (owner of your data)
• Competitor to ad revenue to a publisher (they are also a publisher)

As a publisher, I would find this a dangerous cocktail and I would worry that it may marginalize my revenue.

The best way to maximize long-term financial success for a web publisher is to maintain long-term flexibility. Putting all one's eggs in the Google basket might make for short-term simplicity but it also breeds long-term monopoly. Remember Microsoft on the desktop?

As OpenX's Scott Switzer goes on to note, using Google as one's ad manager gives Google all the data it needs to understand exactly how much margin to give a publisher. If Google is paying $1.00 today and discovers that your other ad networks are paying $.60, Google is a smart enough company to know to drop its average CPM down to that $.60 level.

I'm a big fan of OpenX. I believe it's important to keep the web as open as possible. OpenX is a 100 percent open-source ad server. This keeps customers/publishers in control, not OpenX (or Google).

I don't believe Google released its Ad Manager for any nefarious reason. Quite the opposite. Google undoubtedly views an ad manager as a natural extension to the other value it already provides to publishers, and hence a source of added revenue for itself. Fine.

But just because something is momentarily convenient for a publisher doesn't mean that it should be blind to the hole it potentially would be digging for itself by ceding all control of the online advertising experience to Google. I think Google is an ethical, well-run company. That doesn't mean I'd trust it with a monopoly.

[seo2seo]

The fact that users can choose between openx and Google (and others) rather suggests that fears about a Google monopoly are just a tad overplayed.

Take a broad view; advertising on the Internet is really in its infancy; without Google buying doubleclick and moving things along, it would be a long infancy.

While Google may be the largest player for a while to come, there's still plenty of room for entrepreneurs, revitalised older players and even the occasional dinosaur (so M$ is in with a chance).

Certainly no evidence that open sourcers are being squeezed out.

[russ danner]

This is just more evidence that google is in the information business and it has simply identified on more information stream (read: network effect style leverage on revenue) fronted by a simple service. The rest of us can wise or and follow suite or continue to eat the scraps from the master's table.