Google is continuing its investments in the display advertising arena with its purchase of AdMeld, a publisher utility targeted at optimizing ROI for digital advertising. The $400 million purchase signals Google's continued intellectual weapons stockpiling as we approach new eras for display ads.
What is AdMeld?
AdMeld was established in 2008 by Michael Barrett, the News Corp Chief Revenue Officer who was fired because he couldn't make MySpace float when it had a giant hole in its underbelly. While MySpace has crumbled, Barrett has flourished. He quickly moved from his News Corp position to generating revenue for AdMeld. AdMeld is a publisher-centric utility for optimizing digital advertisements.
AdMeld's sales pitch is that the world of publisher advertising used to be a direct "people business," but has since been so infused with technology that publishers don't know their audiences – and that the technology often prevents publishers from making the deals that are best for themselves. AdMeld proposes that they can provide the expertise and technological resources necessary to resolve that disconnect.
The AdMeld platform allows publishers to access data from various advertising networks in a single location, get in-depth analytics on the composition and behavior of their audience, and optimize their income by filtering ad types and locating low-performance ads. AdMeld also offers an advisory service.
Prior to the purchase from Google, AdMeld has generated more than $30 million in investments.
Google's Display Network: The War on the Horizon
It's not too tough to see why Google, a company already so heavily invested in digital advertising, would want to work with a group of experts who've developed ROI-boosting technology.
AdMeld is just one of many companies Google has swept up to expand the resources of the Google Display Network and other Google ad mediums. Other major purchases have included the $750 million buyout of AdMob, the buyout of Teracent for an undisclosed amount, and the buyout of Invite Media for $81 million in 2009. Total Google investments in ad-company acquisition have surpassed $4 billion over the last eight years.
That's quite an arsenal, and while you can easily justify Google's actions by pointing to their revenue model, there's another motivation to keep in mind: the threat of social networks.
As more time is spent on social networks such as Facebook, where the company runs their own advertisements, Google has to push hard in every remaining property for increased engagement and revenue per user. Further, it's fully anticipated that Facebook and other social networks will continue their display ad innovations (an area where they've long struggled but are continuing to come into their own). If Google doesn't keep up, they could easily be trampled.
Update: Google has confirmed the acquisition today in a blog post.