chicagosem
04-21-2007, 08:50 AM
So Google bought DoubleClick and Performics with it for 3.1 billion (thats 3X more than the value of the NY Yankees). Performics is one of, if not the largest search agencies in the country.
Forget the conflict of interests of Google doing business the competitors such as Yahoo and MSN via Performics. I think this move may have rock the agency world in a couple of years if it hasn't already:
1) Google essentially took a huge step towards eliminating the need for a paid SEM or agency to do paid search by acquiring such a large search agency - They have direct contact with many fortune 500 Clients now. If clients can afford to pay an agency, then they have more money to spend on adwords if they eliminate the middle guy. They basically did just that with the Performics component of the acquisition.
2) They essentially bought information on advertisers conversion rates for pretty much every major vertical - by accessing both search and affiliate performance. Forget their free Urchin program where they can tap into your conversion rates and site performance by keyword, and forget about the Beta CPA program that just launched. If contolling pricing (based on their estimation of an advertisers profit margin) is their goal - they just bought everything they need to do this with this acquisition.
I dont think online agencies will completely go away, but I think this moves threatens their livelihood and is a catalyst for another algorithmic pricing model change. I think their widely accepted cryptic privacy policies and mysterious pricing algorithms can provide them with an easy platform to manipulate pricing based on what they think is in your wallet.
I would be curious on anyone's thoughts on the acquisition - especially if you work for an online agency?
Forget the conflict of interests of Google doing business the competitors such as Yahoo and MSN via Performics. I think this move may have rock the agency world in a couple of years if it hasn't already:
1) Google essentially took a huge step towards eliminating the need for a paid SEM or agency to do paid search by acquiring such a large search agency - They have direct contact with many fortune 500 Clients now. If clients can afford to pay an agency, then they have more money to spend on adwords if they eliminate the middle guy. They basically did just that with the Performics component of the acquisition.
2) They essentially bought information on advertisers conversion rates for pretty much every major vertical - by accessing both search and affiliate performance. Forget their free Urchin program where they can tap into your conversion rates and site performance by keyword, and forget about the Beta CPA program that just launched. If contolling pricing (based on their estimation of an advertisers profit margin) is their goal - they just bought everything they need to do this with this acquisition.
I dont think online agencies will completely go away, but I think this moves threatens their livelihood and is a catalyst for another algorithmic pricing model change. I think their widely accepted cryptic privacy policies and mysterious pricing algorithms can provide them with an easy platform to manipulate pricing based on what they think is in your wallet.
I would be curious on anyone's thoughts on the acquisition - especially if you work for an online agency?