Google's Dominance and Why I Will Continue To Invest in Ad Tech

There have been a couple recent announcements in the marketing and advertising technology worlds.  Salesforce/Buddy Media last week, and now this week, DoubleClick Digital Marketing Suite.  For those of you not following the DoubleClick announcement, read here and here.  This morning, Digiday came out with a an article entitled, “Is Google Running Away With Ad Tech?” which I’d like this post to generally respond to.

Google is Intent Rich
As a media buyer, one of the best performance signals we have for buying media is Intent.  Murthy Nukala, CEO of Adchemy wrote a visionary piece recently that explained a bit about Intent and you can read it here.  Intent is way far down the purchase funnel and in a last click world, it generally gets all of the credit.  Being that Google is an Intent harvesting machine, it will continue to manufacture dollars.   Most of the Intent comes from its search engine, so the biggest risk to Google’s advertising dominance is if Google remains a top search engine.  As of now, it does not look like it’s going anywhere.

Google has Vision
I have a few very smart friends who have sold companies to Google for ad tech.  They are true visionaries and have a common vision.  Inside of Google, they are harnessing that vision and leading the way with it.  Neal Mohan has one of the best jobs in the world, IMHO.  He gets to execute this vision, not just talk about it, with Susan Wojcicki and continue to build one of the largest ad tech stacks we know of as an industry.

Google’s Enemy Is Themselves
At some point, which is unknown, there is a good chance a modular home falls apart because there is a stress fracture.  With Google, they are basically building a modular home with ad tech.  They are buying fantastic companies and piecing them together.  The recent announcement about rewriting their backend onto their own platform is extremely important, but one would have to think that mixed cultures and many different technologies will eventually be a potential kink in their armor.

There size is another reason to be concerned.  Publishers are realizing (some have realized a while ago) that Google is a big threat to them.  Google is the casino and knows both the dealer and the player.  They have the data.  This data can and will (might) be used against either party when it benefits Google.  This is a serious issue, essentially as Google continues to satisfy both the demand and supply side.  If publishers pull away, this means Google has less data.  The less data Google has, the less significant they become.

Google Needs to Watch the Government
We know that Google is big.  They are big enough that they need to seriously be concerned with how they are fronting to the industry.  In many circles, the term “monopoly” comes up.  From an entrepreneurial perspective, monopoly is pretty phenomenal because it means you’ve out executed every competitor and basically have won the war.  However, we know the USA doesn’t like monopolies and there needs to be competition in our economy.  Privacy concerns are serious and Google needs to keep these in mind going forward.

Why I Will Continue to Invest in Ad Tech
We believe that Google is strong.  There is no doubt.  Using a sports analogy, they are a team that you can bet on to make the playoffs each year and have a good shot at the Finals.  However, one has to bet against them.  There needs to be competition in the space and there are many companies impacted by Google’s dominance and won’t let Google take over the entire industry.  Each one of those companies, either direct or indirect competitors of Google will be stepping up their M&A game over the next 12-36 months to build an ad stack that’s comparable or better than what Google has.  Remember, in ad tech, features are very important – and Google with their early lead may have a legacy stack fairly quickly because the features they acquired might get old and stale.   This leaves the door open for many players.

Additionally, we don’t know where the next search engine might come from.  Twitter, Facebook, Amazon, Apple, DuckDuckGo (no cookies, I know), and maybe a few other players are building this.  If Intent breeds dominance in advertising, then these players cannot be overlooked.  Either Google buys them (probably not most of them), or they could be the foundation for the next big advertising tech companies.

Some of the players I’m watching to make moves are:  Apple, IBM, Adobe, Accenture, WPP, SAS Institute, Salesforce, Microsoft, Experian, ValueClick, Amazon, eBay, Walmart, Akamai, SAP and Oracle.

  • Omriliba

    Hi Darren,
    Thanks for all the interesting insights!
    A few posts back, you wrote that you have a rant about startups going after brand dollars. Can you please share your’e thoughts about this subject?

  • Omriliba

    Hi Darren,
    Thanks for all the interesting insights!
    A few posts back, you wrote that you have a rant about startups going after brand dollars. Can you please share your'e thoughts about this subject?

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