Ad Serving Technology Market Engaged In Battle
Page 1 of 1
The dominance of DoubleClick in the ad serving technology market following its acquisition of Sabela did not go unnoticed -- indeed even the Australian Competition and Consumer Commission (ACCC) took a brief look. However, a string of sales from Engage sees the trappings of competition beginning to emerge.
Last week, the newly restructured Engage Australia announced that it had signed eight new clients to its AdManager and AdBureau line of technology products. The new sales represent a significant acceleration in Engage's market penetration, bringing its total client list to around 20.
Colin McIntosh, president of Engage Australia and Asia, estimates that Engage Technology will now serve around 700 million Australian page impressions each month. It's important to note, however, that Engage does not participate in a volume based revenue share for all of those impressions. ninemsn for instance, has purchased a software licence for the AdManager server and hosts it internally.
Interestingly, out of the eight new clients, four are of media heritage. In addition to i7, Engage announced contracts with DWRMedia (publisher of ITNews.com.au), Next Media (publisher of a wide variety of technology and youth related magazines) and Wilson & Horton (New Zealand's largest offline publisher).
Critically, the majority of clients transitioned from other providers, namely DoubleClick and the recently acquired Sabela. McIntosh boldly stated that this trend would continue, and indeed accelerate, saying that in the next three months the majority of the Australia's top 10 sites would be serving their ads through Engage's technology.
Whilst only time can vindicate McIntosh's comments, the trend towards technology solutions for advertising networks is unmistakable. In Engage's case, its Australian operations are now solely focused on the technology behind serving online advertising. This strategy mirrors a recent move by DoubleClick to close the media representation side of its local business.
Left standing in the media representation space are publicly listed BMCMedia.com, Tempest Online and the depleted local arm of 24/7 Media. The challenge for advertising networks in the media representation field has and always will be attracting large clients.
To date, the advertising networks have been unable to present a compelling reason why sites such as Yahoo, ninemsn and f2 should outsource their online media sales. Unless there is a dramatic change, we will see decreasing investment in this area, as online sales forces continue to migrate in house.