Report: Google Considering Invite Media Purchase; And - Why Would Google Buy A DSP?

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Google and Invite MediaAll Things D's Peter Kafka says that Google is considering the purchase of demand-side platform (DSP) Invite Media. Kafka says, "A deal has supposedly been in the works for some time, and one theory is that Google has been waiting for the AdMob saga to conclude before moving forward. Estimates for a price are all over the map, ranging from $60 million to $100 million." Invite Media CEO Nat Turner denies to Kafka that the company has entered into any agreement to be acquired. Read more.

So, why would Google buy Invite Media - or any DSP for that matter? Let's take a shot at it!

  • This could be the beginning of a new, agnostic, strategic vision by Google that includes all inventory sources - even non-Google sources. The new openness strategy could be important especially as the company increasingly comes under anti-trust scrutiny.
  • Openness, Shmopenness. Google wants to win and by aggregating demand, it can drive margins! With an open strategy, it can enable buying across supply sources using data from Google retargeting, for example. If a Google-owned DSP is mapping a cookie created through a Google site retargeting pixel for a user who's moved to Right Media Exchange inventory, Google expands the demand-side buying opportunity it owns - and corrals the buying dollars.

  • Search retargeting - Google wants to eventually create (or add to) a buying platform to enable retargeting of user search profiles across exchange inventory.
  • Google gets its own ready-to-roll demand-side platform that far outstrips what is offered through its AdWords interface with deep integration across supply-side sources and data providers. To roll a DSP's buying platform out to a broader audience (agency or advertiser), they will have to educate the marketplace and add to their customer service or account management teams.... OR could the DART for Advertisers crew could be merged with the DSP and use the DSP's ad server?
  • As Kafka notes, agencies such as those represented by Publicis' VivaKi are using Invite Media's platform. Assuming Google continues to innovate with any DSP platform that it acquires and keeps it inventory-source-agnostic, it can drive deeply into margin-hungry agencies who are moving more budget to DSP solutions which offer global frequency capping across buying sources -and more efficiency than buying from multiple ad networks.
  • Google uses a DSPs tools to enable brand marketers looking to drive deeper digital strategies.
  • The Google-acquired DSP's platform becomes the basis for building a cross-digital, addressable media, buying platform which targets with data from mobile, online video, digital TV (Google TV), digital radio - anything in the digital media realm.
  • A DSP team would be a good cultural fit to help move the Google ad exchange and demand-side platform strategy forward. They know the emerging space better than Google's tech team because - currently - the DSP gets to work with EVERYBODY.
  • Finally, in regards to Invite Media, in particular, given its invested capital to-date, they could likely exit at a price lower than some other DSPs and still make a decent return for investors and Invite Media employees.

By John Ebbert

Originally published Sunday, May 23, 2010.

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