Google Inks MediaVest Deal, Eliminates Ambiguity In Online Ad Buys
- by Laurie Sullivan @lauriesullivan, October 24, 2013
The uncertainty of what media will cost six months in advance can put even the most seasoned buyers on edge. Easing the pain, Google began cutting upfront deals with advertising agencies. Publicis-owned MediaVest became the first on Thursday in a year-long deal that supports display, online video and mobile ad inventory in the U.S.
Google is trying to address industry complaints about uncertainty, but the company has been a major advocate of ad buying maintaining its proper value when auctioned off. The first generation of online media buying, where there were insertion orders for premium display and video, had the same rules for online buying as they did for upfront television.
A Google spokesperson said the transaction process for rich media, video and mobile ad buys is very close to television ad buys. "We're talking with other folks about this," the spokesperson said. "There's not a template on how this will work, but we'll come together with industry partners to figure out how it goes from here."
Some believe more digital upfront deals will emerge in opposition to programmatic buying. Media buyers are willing to pay a premium for ads just to know the future, said Kevin Lee, Didit founder. "Non-guaranteed media buys freak out media buyers," he said. "As more media buys become programmatic, prices are no longer guaranteed. That's why media buyers are not that comfortable with search."
Media buyers became accustomed to using auction-based systems for search marketing but are less comfortable in the systems for display, video and mobile.
MediaVest's U.S. clients Coca-Cola, Honda and Walmart, among others, will have easy access to high-quality content online on YouTube partner channels and top-tier sites in the Google Display Network, like NBC, People.com, and Glamour; and high-quality mobile content, including the AdMob mobile app network and mobile display network.
MediaVest also gains access to Google insights tools and strategists, YouTube and creative resources as it looks to build compelling online experiences for clients. Before Thanksgiving, media planners want the pre-negotiated deals, so they can download a year-full of specific buys and know exactly what they will get in 2014 -- even at a higher price.
Interesting shift in the Google auction approach. Would love to see an analysis of the "premium paid" for guarenteed placement vs. the "cost of managing" the dynamic bidding process that an agency bills back to a client. This could be good or bad for agencies, right? Less work, but if clients are smart they will see this is a lot less billable hours as well. Set it and forget it buying is easier to manage, and it's also riskier for non-performing placements. This is not a trend I would have anticipating Google adopting. It seems to go against their grain of an auction based model and against the trend towards programmatic. Is Google compromising their core values with this deal?
Agree with R.J., it would be interesting to see some type of TCO comparison study.
On the surface this looks a lot like media arbitrage and goes back to the ad network model. However, I'm assuming this agreement will carry significantly higher levels of transparency and could potentially include programmatic components (i.e. Coca-cola commits to specific spend/impression levels in a quarter and gets "first look" at inventory, but can refuse certain % of impressions).