Six Pixels of Separation - The Blog
April 17, 200711:09 PM

Google Buys DoubleClick - Is Banner Advertising Making A Comeback?

"Don't call it a comeback... I've been here for years." (can anyone name this lyric?). I could paraphrase the online advertising news item that shook the online marketing industry to its core last week, but I liked the way MediaPost states it in their Just An Online Minute... email blast:

"Ending weeks of a bidding battle with Microsoft, Google reached an agreement to buy online advertising network DoubleClick for $3.1 billion in cash, the companies announced today... The deal expands Google's foothold in online advertising. The price is almost double the $1.65 billion Google paid for YouTube last year. DoubleClick, founded in 1996, provides display ads on Web sites. The deal gives Google access to DoubleClick's relationships with Web publishers and advertisers. Perhaps equally important, it keeps them away from Microsoft."

A little background to get us all on the same page: I was working at one of the only meta search engines back when DoubleClick first started and the Google guys were still in University without a beta site in sight. To this day, I am a huge proponent of DoubleClick's DART ad serving technology (which has become the industry standard) and I've seen DoubleClick go through some turbulent moments. This deal is well-deserved if you compare it to YouTube, where the video-community was hardly two years old. DoubleClick has been grinding it out since day one and, as we all know, it's not like clickthroughs on banner advertising has been impressive.

This is a good deal for both Google and DoubleClick on many levels (beyond the obvious financial windfall). It's a not-so-great deal for Google competitors, Microsoft and Yahoo! At this point, Google will own many of the channels to online advertising and could relegate companies like Yahoo! and Microsoft to their own garden walls.

I guess the biggest quandary is why? Google re-invented online advertising with their targeted and contextual keyword programs as more and more consumers were installing pop-up blockers and completely ignoring most banner ads. It seemed to me that text ads were a direct reaction to annoying banner ads. Current banner ad statistics look almost as abysmal as TV ads for people with Tivo or PVRs.

I don't think Google bought DoubleClick just so that Microsoft couldn't. Much in the same way we're not seeing that much action on other Google acquisitions like Dodgeball, YouTube or Writely, I have high hopes that Google's strategy team is simply working acquisitions that act like pieces of a puzzle that the general public (yup, you and me) can't yet see.

Online advertising is not going away... in fact, the exact opposite... it will continue to grow. I think the big question is whether or not Google will use DoubleClick's technology to continue serving display ads or if there's a grander picture in place for where online advertising is going?

We questioned the text ad strategy. It works. The acquisition of DoubleClick opens up many roads of online marketing discovery for Google. My guess is that we'll all be pleasantly surprised when Google shows us why they bought DoubleClick and how online advertising can be effective (maybe even by using banners).

By Mitch Joel