Watching Elephants Dance

Posted by Mike Walsh

4/17/07 6:45 AM

 video gameIntegration of old and new media platforms is a theme that has been playing out in the news over the last few weeks. Not on the content side, which is a story most of us are comfortable with by now. But on the advertising sales side.

The Financial Times has a piece today about the deal between Yahoo and a cartel of old print media players including Hearst Newspapers, MediaNews, Cox Newspapers and McClatchy. They have agreed to share a common online advertising platform, cross-sell ads and share content across a range of categories. Makes sense. God help them if they had tried to do it themselves.

At the same time, Google has finally inked a deal with Clear Channel allowing them to integrate about 5% of radio inventory into their advertising sales systems. And lets not forget the big purchase of Doubleclick this week as well, strengthening Google's push into the display ad market. Part of this is Google trying to own the end to end relationship from branding through to search. But there is more to it as well.

When you look closely at all of these deals, what becomes clear is that with the increasing complexity and fragmentation of the media market, efficiently aggregating audiences for advertisers requires both scale and sophisticated technology.

Its pretty hard for any one publisher or broadcaster to develop this themselves. Media buying agencies used to be useful, when the main complexity was deciding where and when to place ads, and keeping track of everything. But the world has moved on, and a new layer of platform providers are filling the breach.

If you don't believe me, take it from the new jungle giant himself. In an interview with Wired, CEO Eric Schmidt speculates about Google's future. More than just a search engine, he argues, they are an advertising system. The implication is - for everything.

And if that is true - it may sharpen the focus of media companies on their capacity to sustain strong editorial brands and curate content, rather than defending strong sales relationships. And that, in a world of increasing choice, can be a scary place to be.

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