Ad-serving is the technical bedrock for both publishers and agencies. For publishers it acts as a carousel projector, placing banner ads into web pages and managing their rotation and display so the publisher's revenue is maximised. For agencies, it allows the performance of hundreds of different ads on different sites to be tracked in one place, and for copy to be targeted based on behavioural or other audience information.
For both sides, ad-serving is about two things: data and control - the ability to make advertising accountable, and to act on that information quickly and efficiently. So fundamental to the business are these technologies that the online media business simply couldn't exist without them.
So, as the past few weeks have seen a flurry of significant deals in the ad-serving space, agencies and publishers alike have been staying close to the game.
Like the small tremors felt before a big quake, early signs started last year when DoubleClick bought German-based Falk, an ad-serving company with strength at home and in the Benelux region.
But the ramp-up started just a few weeks ago, with DoubleClick going on to acquire the UK's Tangozebra for 拢15m, and really warmed up when, in turn, DoubleClick was snapped up by Google for $3.1bn following a bitter battle with Yahoo! and Microsoft. Microsoft had for years unsuccessfully tried to develop an ad-server and, as operator of one of the world's biggest media websites, was loath to put its data in the hands of a bitter rival in the search space.
Having lost out, irony fans were pleased to see the software giant calling for competition investigations into the deal. But the ink was hardly dry on the letter of intent when Yahoo! sucked up the remaining stake in Rightmedia. Two weeks later, AOL bought Adtech in Germany and, on the same day, WPP announced its acquisition of 24/7 Realmedia, an ad-serving and media sales network.
It wasn't WPP's first foray into media sales, but the absorption of an ad-server underlined just how concerned Sir Martin Sorrell must have become about the power the DoubleClick deal might give his 'frienemy'. Whether it's to the benefit of WPP's clients to have an in-house solution is for another article, but it started to look as though Microsoft would always be the bridesmaid, never the bride - and it was feeling the pressure.
Which brought it to the acquisition of aQuantive, owner of the Atlas ad-serving business. If observers thought the Google/DoubleClick deal expensive, at just over 10 times previous year's revenue by some estimates, this was even saltier at nearly 14 times 2006 revenue - $6bn. Given that Microsoft was rumoured to have made an offer at just under seven times revenue, it had to dig deep to play catch-up.
And it's deeper still than it looks. aQuantive generated more than half its revenues (58% last quarter) from AvenueA/Razorfish - a digital agency business, and just 27% from Atlas, its ad-serving business.
It's a bit like buying the house because you like the garage. Microsoft has ended up with a raft of other businesses that it will probably dispose of just to make sure it got the ad-server it wanted.
So the music's stopped and everyone's sat down. Is this it?
The truth is, nobody knows how big the online economy is going to be, but on the scale of some of these investments relative to current income, some people are really betting big. Ad-serving is just one service business in the internet economy; there are going to be many more rounds of musical chairs before this year is out.
- Andrew Walmsley is co-founder of i-level
30 SECONDS ON ... BIG QUAKES
- One of the earliest major earthquakes recorded occurred in Aleppo, Syria, on 11 October 1138; the fourth-deadliest quake in history, it is said to have left 230,000 dead, although this is believed to include the effects of a separate quake on the Jazira plain the previous November and a further event in 1139 in the Persian city of Ganja.
- England had to wait another four centuries for its first big seismic encounter, when tremors around the Dover Straits on 6 April 1580, at about 6pm, rather disturbed the locals' evenings.
- The Valdivian Earthquake, also more appropriately known as the Great Chilean Earthquake, was the most powerful ever recorded. Rating 9.5 on the Moment magnitude scale, it took place on 22 April 1960. It caused damage worth up to $800m at the time (equivalent to more than $5bn today).
- The most recent big quake took place on 16 May in Western Laos, with a 6.3 magnitude.