On Middlemen: Google’s Mohan and Yahoo!’s McGrory Discuss The Online Advertising Value Chain

MiddlemenAdExchanger.com recently asked several members of the advertising ecosystem about “Middlemen” and, specifically:

  • “Are there too many parties trying to insert themselves into the online advertising value chain? How do you see this playing out?”

Over the next several days, we will post their answers.

The following contributions are from Google and Yahoo! which provide not only key parts of the value chain, but also represent companies which may be catalysts for consolidation of the industry in the future.

Neal Mohan
VP of Product Management

There’s lots of innovation and competition taking place on both the buy-side and the sell-side, to help advertisers take advantage of tools like real-time bidding, and to help publishers maximize the value of their inventory. Ultimately, in a competitive marketplace, only those businesses that provide excellent, reliable technology and that add real value will succeed. We view our job as developing technology that can bring advertisers and publishers closer together, to help deliver that value.

On the sell-side, major online publishers are sophisticated businesses. They tell us they’re looking for a customizable, extensible technology solution that encompasses – and maximizes value across – both their direct sales and their indirect sales. That’s what’s driving our product strategy and the close integration of DFP and the Ad Exchange.

Ramsey McGrory
VP North American Marketplaces

The digital advertising ecosystem is increasingly complex as the demands of buyers and sellers evolve, and as the creative forces of start-ups look to penetrate the market. The conversations happen every day to shape how the industry evolves.

At the core of the ecosystem, advertisers and publishers of all sizes look to product/service providers to enable the interactions between them. If these intermediary companies are providing long term value, they will remain. In the meantime, new business models are born every day, and everyone is trying to figure out the costs and benefits of each company. Whether it’s in market mix modeling, order process, targeting, auditing, measurement or the near infinite other areas, many of the businesses cannot survive as standalone businesses and may be folded into larger company offerings.

Online advertising has continued to grow, innovate and thrive under a strong self regulatory environment led by organizations such as the IAB, 4As, and NAI. The long term rationality of the marketplace will figure out whether the many players in the market have a place. Yahoo! is working closely with the industry to find the right balance, and in fact, [launched] a pilot DSP (demand-side platform) Partner program
[yesterday] and will continue to look for innovations that are in sync with our efforts to deliver a unique combination of science, art and scale to our advertisers.

More opinions on Middlemen>>>

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