Google Shrugs Off Competitive Exchange

By Mike Shields • September 16, 2011 •

All the talk in the industry is Yahoo, Microsoft and AOL ganging up on Google with an ad exchange, but Google’s executive behind its exchange strategy doesn’t appear too concerned.

Google vp of product Neal Mohan, speaking at the PaidContent Advertising Conference. offered a bemused take on the proposed sales partnership between AOL, Yahoo and MSN. The consensus in the digital media world is that that the tri-portal pact is aimed at using AppNexus to establish a premium exchange. But according to Mohan such an exchange already exists, and its called the DoubleClick Ad Exchange.

“We think that we operate a very premium exchange,” said Mohan, noting that Google works with hundreds of large media brands. And those companies have doubled the amount of inventory they sell through the exchange over the past three to four quarters, he said. Even better for publishers: revenue for exchange sellers has increased by 188 percent overall.

Thus Google doesn’t need to worry about what its portal rivals are plotting. Mohan declined to comment on that partnership’s prospects. “I don’t know much about it,” he said. “I wasn’t invited to the dinner.”

However, Mohan did use yesterday’s keynote to announce that the company has been beta testing a video exchange for several months. It is planning to open up the exchange to more publishers this week, something that might frighten various video ad networks. Plans are in the works to sell more mobile video via an exchange as well.

So far, the amount of video inventory flowing through the beta exchange test has grown 50 percent month over month, per Mohan. “That’s essentially consumer behavior, as people consume more and more video.”

Mohan was bullish on the idea that given that consumer shifts toward consuming more video, and more content in general on digital channels, that the market for online display advertising will balloon – to “$200 billion over the next few years,” he said (that figure includes video, using Mohan’s definition).

Right now, in his opinion, the $25 billion or so global display market should be as high as $75 billion, given the time users spend with the medium. Friction in the buying process is holding that back, in Google’s view.

“We want to be an end-to-end platform for buying and selling display advertising on the Internet,” he said.

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