Google's acquisition of Invite Media last week has signalled its intent to dominate the display space. It's building out an awesome automated infrastructure - but at what cost? Being a media seller and buyer en masse has inherent conflicts of interest. How do you know a player in that situation will not "game" the system, Afterall, margin needs to be made on both sides. I'm not saying that Google would get involved in this practice. But there is concern now emanating from agencies and publishers alike. I think personally the agencies could be in real trouble. They already outsource their ad serving function to either Microsoft or Google - and now the latter owns a DSP. What if Google allows buyers to use search data to power automated buys? Agencies can kiss their proprietary data strategy goodbye. Nobody can win against the house.

If this did happen, and I was a CMO, I would be asking myself why I need an agency to manage my buys. I could hire a couple of account managers and let Google do the heavy lifting. And probably get better results with a lower cost because of the unbelievable search data I can use through its DSP. And what about re-targeting? Yep the big G can do that too. Brilliant - a one-stop shop for all my media buying needs. Where do I sign up? Alarm bells should be ringing with C-level agency execs at the minute.

Darren Hermann, Chief Digital Media Officer at Kirshenbaum Bond Senecal + Partners, knows a few things about automated trading and where the future of the display lies. He helped found Varrick Media, a specialist exchange-trading unit within kbs+p some years ago. He wrote an interesting post this week on the very subject of big agencies ceding too much control to players like Google and Microsoft. Darren's argument focuses on the ad server, the hub of all display media buying for agencies. He argues that as media buyers and sellers both Google and Microsoft are a little conflicted (given their dominance on both the buy and sell side) and might not always have the best interests of the agencies:

I’m skeptical of Google and MSFT, specifically with the hundreds of billions of impressions they serve collectively. It would make sense that every campaign served thru them would make them smarter. Hey Toyota, did you know that your campaign for the Toyota Camry just made Honda’s campaign for the Accord much smarter?

There is the above issue and now an important one. MSFT and GOOG can see every advertisers campaign that uses their system including cpms, impressions, conversions, etc. Being that MSFT and GOOG sell media too, they have a huge advantage if they were to use that data in the way they pitch us and price us.

So what to do? Well, that's something for highly-paid agency strategists to figure out. Agencies could go agnostic I suppose, and use a buy-side only ad server. This would address some of the issues Hermann talked about in his blog post. Agencies could also consider building out their ad server technology. WPP already own an ad server through its purchase of 24/7 Media so it's no stretch of the imagination to imagine that other holding agencies couldn't follow a similar route by buying in the technology. They could build in some DSP capabilities. That's why I reckon a MediaMath or another hybrid service/tech buying platform will be bought by a holding comapny. The one thing that agencies need to be aware of is that their position in the display (or even digital media) buying chain is quickly being eroded by the growing influence of some ad-tech players – and ultimately the evolution of the display space.