Google has boosted its display advertising business with the purchase of AdMeld, a company that makes it easier for publishers to sell and buy internet display space and is becoming a prominent player in online advertising.
In a blog post, Google’s VP of Display Advertising, Neal Mohan, says:
Providing better ad management services to publishers is an area that has seen a huge amount of investment in recent months. Formed just over three years ago, the Admeld team is an example of the huge strides the industry is making—it has quickly developed a great service that is helping many major publishers manage their ad space more efficiently and profitably.
By combining Admeld’s services, expertise and technology with Google’s offerings, we’re investing in what we hope will be an improved era of flexible ad management tools for major publishers.
The acquisition, reported by Techcrunch to be for $400m, marks the latest in a wave of investments in a new batch of start-up technology companies that are bringing a new approach to the display market. Late last month, the venture capital arm of SAP, the German software company, led a $50m fundraising in OpenX, another start-up.
AdMeld, like OpenX and other newcomers, sells technology tools to publishers to enable them to post advertising inventory they have for sale in online exchanges, where advertisers can bid on it. The auctions are done in real time, matching advertisers with page impressions on the internet in a split second to maximise the revenue for publishers. While such exchanges have long been seen as a potentially important new focus for online advertising, they have generally only handled low-value inventory, such as user-generated content from social media sites and remnant space that publishers have been unable to sell through other methods. However, there have been signs recently of more high-quality inventory being put up for sale on the exchanges, thanks partly to AdMeld, which has succeeded in attracting the sort of premium space that was not available before, according to Michael Greene, an analyst at Forrester.
Display advertising exchanges are forecast to be around $1.4bn in the US this year, or 15 per cent of the online display market.
Nino Marakovic, head of SAP Ventures, said that online display advertising was “the first time a big industry has adopted real-time infrastructure”, making this an important test for the sort of “live” bidding that would eventually invade other industries.
Watch this space and soon we will be able to buy all prominent internet or TV advertising all on a live bidding auction, and could mean the end of conventional media buying agencies.