Google Display Network Reserve – Friend or Foe?

On April 14 when Google announced their Q1 Earnings, amongst all the revenue growth, management changes and Wall Street apathy, there was a small interesting announcement. Whether you are an Advertiser, Publisher or operate somewhere in between in the eco-system, Google SVP of Ads, Susan Wojcicki’s proclamation of the “Google Display Network Reserve” certainly should give everyone some pause.

If you look at Terence Kawaja’s Display Landscape Chart in Figure 1, apart from a nauseas feeling due to the overwhelming number of players operating, another picture emerges when looking at some of the players in the various segments as it pertains to Google.

Figure 1: Display Landscape (courtesy Terence Kawaja – Luma Partners)

Invite Media, Teracent and DoubleClick along with many smaller acquisitions along the way have provided them with a potential end to end offering between Advertisers and Publishers as they have successfully accomplished in a different manner in the Search Engine Marketplace (SEM). So in Display they now have an Ad Network, Ad Server, DSP, Creative Optimization and Ad Exchange all under the Google umbrella. This ultimately allows them to have a dominant footprint in all aspects of the biddable and remnant Display inventory market.

However one part of the Display market where Google up until this point has largely had not that much of a heavy presence in the market is the guaranteed display market. This is the oldest part of Display and indeed pretty much of any online advertising where advertisers and publishers come together (often via agencies, ad networks or other advocates) and agree on a fixed Cost per Thousand Impression (CPM) price for their Display media buy. It has often been dominated by brand focused advertisers but certainly is also very much utilized by direct response advertisers as well.

The operation of these deals is not too dissimilar to what has occurred in the Print, Television and Radio worlds for decades. Given there is no auction, algorithm or other form of technology, other than Google now getting a cut via Advertisers and Publishers using DoubleClicks’s Dart ad server, Google has not really had any value add to this transaction.

Enter The Google Display Network Reserve
The Google Display Network Reserve as described here by Susan Wojcicki in Ad Exchanger is Google’s initial response for playing a part in this transaction and extracting additional revenue for themselves from an advertiser set that they themselves define as brand focused. Google, via SEM, has always been known as the haven of direct response advertisers and brand focused advertisers historically have often had little to no direct involvement with Google with their advertising.

The Google Display Network Reserve is Google’s aggregation of “high quality” and “scalable” publishers by vertical which advertisers and agencies can buy on a guaranteed CPM basis via their Google representative. Of course quality and scalability are very ambiguous terms and Google have divulged little at this point as to the transparency for advertisers as to the exact publishers they will run on. Generally Google prides itself on transparency, however in recent times they have had to bow to some publisher’s wishes by making their domain data anonymous in the Ad Exchange (AdX).

What Does This All Mean For Me?
Well if you are an advertiser or agency who buys media from exchanges, other publishers, ad networks, etc. as well as spend money on things like SEM, then you should maybe ponder this. If Google can see how much you are willing to bid for keywords in search, how much you are bidding for display media in the exchange auctions and now knows upfront how much you are willing to pay guaranteed for certain categories of Display media. This translates to a lot of information that they have about you as an advertiser and your propensity to pay for online media. This becomes even more stark if you use Google Analytics, DoubleClick as your ad server and have Google conversion tracking on your site.

Google are famous and successful by being able to provide turnkey type solutions for advertisers and making things simple for anyone to start a campaign. They are now via the Display Network Reserve trying to bring that knowhow to another area of the advertising market with a solution that is also designed to placate publishers who have often decried Google for being to advertiser friendly at the expense of them.

We will leave you with this final thought. Imagine back to the time when you negotiated with the New York Times to run some ads for a negotiated rate. OK now imagine you want to run your ads on some other newspapers but to do it you will negotiate the rate with a representative of the New York Times on behalf of the other publications. If nothing else that would make for one interesting set of negotiations!