AdAge Digital published an article “How Google Has Helped Build Brand Advertising Online” this past Thursday and I wanted to address some of the 3rd party ad serving issues called out by Tim Armstrong, Google’s VP of Advertising Sales.

Here’s the part about 3rd party ad serving:

A Bank of America analyst asked Mr. Armstrong about Google’s ad-serving philosophy and whether that was hindering marketer use of its display network. While most major online agencies serve their ads through Doubleclick or Atlas to simplify delivery and reporting, Google hasn’t yet opened up its network to third-party ad serving. That means an agency that uses Doubleclick for virtually all of its ad placement would have to use a separate ad server, Google’s, for buying display ads across AdSense.

Mr. Armstrong said Google faced the same issue in 2000 and 2001 with search — people had asked whether Google would use a third-party ad server for search. Third-party ad servers, he said, “assume they can figure out how to target more effectively than you can.” He said Google has been happy not to use third party ad servers to deliver its search ads and that it’s “working diligently” in the branded ad space to continue to serve ads effectively.

In terms of search text ads, there’s really no reason to use a 3rd party ad server to deliver the actual creative since most advertisers do not consider a “view” of a text-link to have a significant impact. Google already allows 3rd party click tracking through AdWords, advertisers just use Atlas/DART redirects in the Destination URL fields.

The Google display network, on the other hand, would greatly benefit from allowing 3rd party ad serving, but not for the reason the article outlined — “Third-party ad servers, he said, “assume they can figure out how to target more effectively than you can.”

Here are 3 benefits from 3rd party ad serving that would allow advertisers to derive more value and in turn spend more branding dollars with Google’s display network if 3rd party ad serving was allowed:

1. View-Conversion Tracking - Google still takes the “click tracking” approach to display as it has done with text even though advertisers are increasingly looking for brand metrics beyond the CTR including brand engagement and view-based ROI. Without 3rd party ad serving, advertisers are not able to measure whether or not people who see the branded ad are in turn visiting the site, even when they haven’t clicked. Experiments to measure “non-click” activity can also be controlled through testing on 3rd party ad servers which allow for test/control group setups of users who are exposed to branded ads and those who are not. Atlas Institute has already conducted a study into the effects of banner impressions (http://www.atlassolutions.com/pdf/BrandingEffect.pdf)
2. Behavioral Targeting - Contextual relevance is a great first step. When you can overlay behavioral targeting, it gets even better. 3rd party ad serving has nothing to do with where the ad gets served (Google still controls that), it has to do with what message is served for which audience. Using simple targeting on 3rd party ad servers, one can target messages based on past user behavior on an advetiser’s website. For example, if you’re a car manufacturer, having your “Visit AcmeCars.com” is a great message for those customers who are not in-market. What about a user who has already visited your site and browsed for, let’s say, the Acme Destroyer. With 3rd party ad serving on Google’s display network, the ad server can serve up “Test Drive the Destroyer at your local Acme Dealer” and that may improve ROI and response rates.
3. Unified Platform - Agencies and Advertisers hate having to go into multiple interfaces to run and track their marketing programs. Swapping creative and changing landing pages can become part of the existing production/execution process flow once ad serving is consolidated into a 3rd party ad server.

In short, everyone wins.

Related Articles:

Jay Sears at ContextWeb has a write-up on this as well on the ContextWeb Blog.

Disclaimer: I work for Avenue A | Razorfish, a division of Aquantive, which also owns Atlas, a 3rd party ad server. My comments in this post are my opinions and are offered out there as my 2-cents.