Very exciting news today with Google buying Teracent. Dynamic creative is a key component in making display act more like search. Way back in my first post on this blog, I talked about how the ability to optimize the creative was critical in the convergence of search and display. This acquisition shows that someone at Google thinks I’m right (still looking for them to credit me with that idea)
This acquisition will also drive some other changes in the market:
- Accelerated Dynamic Creative adoption – while they may be upset they weren’t bought by Google, the other dynamic creative providers should be very happy. First, while Google is huge, it doesn’t own display, not even close (not yet, anyway). So the rest of the display world is there for the taking. Second, Google/Teracent will push marketers to think this way – which will accrue to Tumri and Dapper. Finally, many more marketers of all sizes will now be exposed to dynamic creative – which will generate experience, case-studies, etc. The only negative is that Google has this annoying habit of giving things away for free – which can sometimes be hard to compete with. But Omniture seemed to handle it just fine.
- Publisher Acceptance of Dynamic Creative – currently, due to file size restrictions, most dynamic creative is either flat out rejected or simply can’t scale on the exchanges. This is either done because systems for approving creative haven’t recognized this new type or because the sellers want to keep the use of advanced technologies for their direct sales force (answer is likely a little of both). Assuming Google makes Teracent the default dynamic creative provider in the Doubleclick Ad Exchange, then this will definitely force some changes in the market. Yahoo, particularly, will need to respond (I wonder if Tumri has been invited to visit Sunnyvale tomorrow?). At a minimum, it should become easier to get dynamic creative approved and scaled on the exchanges. (Side note – rejecting creative simply due to file size without regard to the technology involved has to be the most poorly thought out tactic of publishers today. Here’s a perfect example of where a display ad can pay more, and it’s being rejected. But that’s for another day)
- Search to Display transition – In my post on the launch of the Doubleclick AdX2.0 and how Search and Display marketers would finally go head to head, I brought out how hard it would be for experienced search marketers to get up the learning curve in display. One reason is the creative – from creation to trafficking. Teracent solves a lot, if not all, of these problems. Ironically, the thinking behind how Teracent handles display ads is probably easier for an experienced search marketer to understand than your average display marketer. Teracent breaks down creatives into components – it’s no longer an art, it’s a science. That’s exactly how search marketers think. Qualitative judgement goes out the window. I may need to reevaluate my decision in the Search vs. Display battle (or it’s at least a lot closer).
- More Acquisitions – I know 50+ companies that have some foot in the display “exchange” space. This excludes all networks and publishers, simply companies adding technology and smarts to the management of display marketing on the exchanges. Teracent is the first of those companies to be acquired (second if you count Acerno by Akamai last year). Google gave notice in the recent earnings call that they would be interested in companies that “have figured out better ways of sorting and working on display ads.” So it probably has more of these on the horizon and acquisitions are always copied so expect others to follow. The only damper here is that, of the usual acquisition suspects, Yahoo and AOL are focused on other stuff. So expect a Microsoft announcement in the next few months with Adobe being a dark horse acquirer in the space.
- Everyone’s a DSP – We at MediaMath invented the DSP model back in 2007, but nowadays everyone is a DSP, or is claiming to be one. While Teracent is known for its dynamic creative product, buried within its technology is the ability to buy media dynamically. They just focus more on the creative while others focus on media and/or data. So Google just bought a DSP, and I guarantee they know it.
In summary, this is exciting. The behemoth of search has (again) deemed display important, has said dynamic creative is critical, and has bought one of the leaders in the space. Pretty cool stuff. Convergence continues.
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