Is today's ad server call going the way of yesterday's long distance telephone call?
Before the mechanical switch came along and put Mabel the long distance operator on permanent vacation, making a phone call outside one's immediate area was a very big deal. Soon electronics and network effect took over, and telecom deregulation opened the door for swarms of competitive carrier networks. Long distance became commonplace and prices began their long tumble down toward zero.
Science fiction writer Arthur C. Clarke is famously credited with predicting the end of telephone call charges in his 1988 novel, "2061: Odyssey Three," where he wrote, "With the historic abolition of long-distance charges on 31 December 2000, every telephone call becomes a local one, and the human race greeted the new millennium by transforming itself into one huge, gossiping family."
Infrastructure and competition killed excessive long distance telephone charges. New telecom players rushed in to bundle phones, minutes and value-adds into a dizzying array of options. Consumers loved it and bought it.
Now it's time to ask why anyone still needs to pay for plain vanilla ad serving. The web came of age as a creature of telecommunications. Pre-bubble riches were poured into building vast fiber-optics networks in anticipation of endless demand from the new titans of the internet. But as voice and data transmission also became better and more reliable, they actually required less bandwidth, and so those communication networks have continued to operate at less than full capacity.
Replacement technology is always better or cheaper or faster or some combination of better and cheaper and faster. Today we assume, for example, that it costs nothing in bandwidth or storage or processing power to add new subscribers and web pages. But this notion hasn't been widely applied yet in the realm of ad serving.
Freeware and shareware ad servers performed well enough in the early days of the web, and there are probably dozens of these applications still merrily plugging banners into pages all over the web.
Meanwhile, commercial ad servers have become a mature tech business that follows rather than leads new trends in targeting, rich media delivery, tracking and measurement methodologies. Ad networks now perform basic chores once the exclusive domain of ad servers. Providers of optimizing and targeting technologies do this as well.
For the past two years, the company for which I work has been providing publishers, networks and advertisers with an ad server for free as part of their membership on the Right Media Exchange.
Now Google comes along attempting to deliver the coup de grace for ad servers: If your website is in one of Google's key ad categories, they say they'll give you an ad server for free in exchange for access to your inventory. Will publishers entrust their inventory to Google in order to save ad-serving charges? With the search giant encroaching on so many segments of our business, this is no sure bet, but it's available for those who dare.
This cannot be good news for commercial ad servers. Accipiter sold itself to Atlas recently, and perhaps others will seek shelter elsewhere.
But fundamental changes like no-fee ad serving are very good news for the future of technological innovation, better and cheaper and faster ways to get things done online, and building businesses that scale and generate profitable sales for the long term.
Companies that provide technology and services for internet advertising and marketing are increasingly under the gun to prove they deliver much more than the value of commodity services such as ad serving. They must have a better way to target or optimize, a better ability to connect buyers and sellers for mutual benefit, a better service that is distinguished by the unique ability of its people and its products to improve margins, productivity and efficiency.
Operator, get me something special-- with a side order of ad serving!
Bennett Zucker is vice president of the Publisher Media Exchange (PMX) for Right Media, Inc. .