Google as potential competitor in ad serving tools
As indicated above, Google permits display ads to be placed through its AdSense network (but not on Google.com). But advertisers generally chose networks other than AdSense to place display ads because Google is unable to provide the metrics required by advertisers purchasing display advertising. Google therefore decided to develop a new ad serving product for both advertiser- and publisher- side display ad serving (GFA and GFP), which is still in the early stages of development and is not currently available.
[…]*, there is no indication of any likelihood that it would grow into an effective competitive force. Google has no significant experience with display advertising or the advanced metrics required by customers and thus needs to develop these products from scratch. There is no indication that it is more likely to enter successfully than others.
The technology used in Google’s existing advertising business is different from the technology used in publisher and advertiser ad serving products like GFA and GFP. When Google began to develop GFA and GFP, it did not start by adapting existing Google products. With respect to publisher-side ad serving, Google’s AdWords system is entirely auction-based, which has little to do with the reservation-based technology that would allow a publisher’s direct sales team to make commitments to particular advertisers as to when and where their ads would appear on the publisher’s site.
Google’s relationships with publishers and advertisers do not provide detrimental advantage for the launch of a new product such as GFA and GFP. This relationship is based on the provision of text ad space. Google would have no prior display ad track record with the customer. At the same time, these advertisers and publishers already have established business relationships with other providers of display ad space and display ad serving. Other potential entrants, such as rich media companies, may be better placed in terms of customer relationships, as they may already be providing their customers with rich media ads (including serving of the ad).
There are at least two other major categories of well-positioned potential entrants into ad serving, ad agencies and portals. Ad agencies have long experience working with advertiser-side ad serving solutions and dealing with major display advertisers. On the other hand, portals are major web publishers with their own direct sales teams that sell display ad space on their websites. Portals have relationships with major advertisers, and have long experience using publisher-side ad servers to show display ads on their websites. Some of the many recent entrants into ad serving include ad agencies (in particular WPP) and web portals (in particular Microsoft, Yahoo!, and AOL). Google would not have advantage over other ad networks, including those of Microsoft or Yahoo!, that have more unique visitors, more sophisticated display advertising technology, more relevant data and an historical focus on display advertising.
284. In the near future, Google could have developed its technology. Respondents to the market investigation considered that once available, GFA and GFP could become competitors of other display ad services, such as DoubleClick's.