This week, AllThingsD broke a story that made media buyers sit up and take notice. However, not all of the noticing was positive. It seems that AOL, Microsoft, and Yahoo! are planning to ban together. In an effort to compete against Google and ad networks, AOL, Microsoft, and Yahoo! are rumored to be planning to sell each other’s display advertising inventory
In a nutshell, if one of the three companies receives a display advertising order that it cannot fulfill, its salespeople will fill the remainder of that order with display ads from the other two partners’ inventory rather than going through third party ad networks. The deal should help AOL, Microsoft, and Yahoo! retain more ad revenues than they do when they rely on third party ad networks to backfill incomplete orders.
The three companies also hope that the new partnership will make it more attractive for advertisers to buy ad space directly through them rather than through ad networks. Of course, AOL, Microsoft, and Yahoo! make more money when they cut out third party networks, so the partnership has the potential to benefit all three companies if it actually works. Remember, these are three large, slow, and challenged companies. Can they work together successfully?
On the other hand, AdWeek reports that brands and advertisers are not as excited about the new AOL, Microsoft, and Yahoo! consortium as the three companies might have hoped. Media buyers wonder how the new partnership will actually help them. They question whether the benefits are strictly going to come in the form of increased revenue for the consortium or will buyers receive added value beyond the “convenience” of buying through a single source. For large media buyers, that “convenience” isn’t a big selling point.
AdWeek also provides insight from Forrester Research analyst Joanna O’Connell who believes the partnership is just a short-term step that is more of a band-aid solution rather than one that holds great strategic potential.
At this point, AOL, Microsoft, and Yahoo! aren’t talking. They haven’t confirmed their partnership plans, so media buyers, advertisers, brands, and competitors can only speculate. The question everyone is waiting to get answered is will these three companies be able to successfully pull this partnership off and how will advertisers and media buyers benefit from it? We’ll have to wait and see what the answers to those questions are once AOL, Microsoft, and Yahoo! come clean with their plans.
What do you think of the rumored AOL, Microsoft, and Yahoo! consortium? Leave a comment and share your thoughts.
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