On Second Thought, Maybe Web Advertisers Will Dominate Web Marketing Systems

Wednesday’s post about online marketing systems generated some interesting discussion. You’ll recall it drew a picture of several systems (Web ads, mobile messages, email, paid search, unpaid search) feeding traffic to a Web site, which in turn was served by several more systems (behavioral targeting, site optimization, Web analytics, real time interaction management) that manage customer treatments. I speculated that the most likely candidates for combining all these systems were either the Web platform vendors or enterprise marketing systems.

But as I reflect on the really big recent acquisitions -- Google / Doubleclick, Microsoft / aQuantive, WPP / 24/7 Real Media – I wonder whether the real heavyweights will be the Web advertising vendors. They’re not software companies in the normal sense, but their businesses are based heavily on technology, both for integrating with Web sites (relatively simple, I think) and for matching the right ads to the right viewers (very complicated). What makes them inherently powerful is they earn commissions on an external revenue stream, which most software companies do not. This gives them the financial resources and motivation to extend their capabilities into the other areas of online marketing. Offering a more complete set of ways to serve advertisers will both be a competitive advantage and make it harder for customers to go elsewhere. That’s always an appealing combination for a vendor.

This bodes ill for the many stand-alone online marketing firms. A few lucky ones will be acquired, but the rest may find themselves frozen out of a tightly integrated marketing infrastructure. I'd like to think marketers would have the vision to insist on openness to prevent that, since this is in the marketers' long-term interest. But the path-of-least-resistance appeal of built-in tools is one of the most reliable motivators in all of technology, so it's unlikely to fail this time around.