More Thoughts on Microsoft and the Banner Market

Now this was interesting. I posted about the Banner Server Market Changing early in the day and a few hours later, Microsoft bought aQuantive for $6 billion. This resulted in my post being quoted on alarm:clock and linked on techmeme.

The interesting thing is that there is no big banner server provider left really. There is Tribal Fusion as Venturebeat posts. That doesn’t really fit though I have to say. Tribal Fusion is not the same as DoubleClick or Atlas or Ad Tech. Those are banner server providers and Tribal Fusion is a network, so it would not be what Microsoft needs. As I said in my last post, there are a few small ones left, but no big ones with huge customer contacts and big potential ad impressions handeled. Remember that DoubleClick does not really sell ads on the spaces it handles on publisher sites, but is just a technology providers. Same for Ad Tech bought by AOL and same for large parts of aQuantive, Atlas namely.

As some have already put it, this is for MS to stay in the game. They don’t want to go to Google, AOL or Yahoo for running banners on their properties. So this was a must buy. Just imaging Yahoo! buying them or another agency like WPP buying 24/7 Real Media just now. This would be hell.

The best comparison of the buying action I have seen on Pauls blog coming from zenrob. The important thing is the money spent per ad impression served.

Google/Doubleclick: $0.0107

WPP/24/7: $0.0032

Microsoft/aQuantive: $0.0272

Yahoo!/Right Media: $0.0142

For me the Right Media deal doesn’t really fit in here because this is a mix between a network and a service providers, really more of a market place and actually very close to my VISA model, so I do really like the Right Media buy. Best one of them all as a gut feeling.

But anyway, as you see, Microsoft paid a real premium for aQuantive, but they did so to have a very big foot in the market, and really in three. For one they now have Atlas as a banner server system for agencies and publishers, DRIVEpm as an arbitrage system buying ad spaces in bulk and then running performance based campaigns over them (can be very lucrative business, I know, but might become dangerous as people want to buy into those spaces that publishers could get to buy standard CPM deals, but that’s another post), and avenue a razorfish an interactive agency. Microsoft is now a bigger ad play than they were before and they need that knowledge to exploit the hell out of all the properties they will have soon. DoubleClick on the other hand was bought for the relationship with agencies only, because the technology is just not that amazing (actually the interface was so damn slow when I used it it was a pain).

If you want to read a few more posts I suggest going over to this alarm:clock post with a roundup of views of other people.

And by the way, I think DRIVEpm is a large part of that deal, because it is how you can push search ads on sites. But let’s see where it goes.