Amidst all the excited talk of Spotify iPhone apps and Apple tablet devices this week you just might have missed some interesting news from our friends at Google (and no, I’m not referring to the fire in their London office)…

On Tuesday Google quietly announced on their AdSense blog that they plan to open up their Google Content Network to third party networks as a way to maximize advertising revenues for those publishers using AdSense as a revenue stream. For publishers this is definitely a boon but from Google’s point of view this is a surprising move – on the one hand it will obviously generate incremental revenue as it effectively places a whole range of additional advertisers on the network without any work yet at the same time it weakens their position slightly. In effect they have taken some of that niche reach out into the long-tail that some of the other networks lacked and handed it straight over to them.  You could well ask then - given that any of these third party networks will have additional reach, why advertise on Google when you can simply advertise on one of these (yet to be announced) third-party networks?

In reality, as always, things are a little bit more complicated than that. Firstly publisher sites have to opt-in to these third party networks so Google won’t exactly be handing over the keys to the kingdom. As an agency we would also generally point out Google’s advantages, since their network gives advertisers complete transparency and control over where they appear, where conversions come from and what the costs are. This generally means that a well managed campaign on Google probably trumps a campaign run through a third-party network (at least in terms of like-for-like performance on the same sites). The networks also have the ever growing challenge of assuring quality environments for advertisers and this move certainly won’t make IASH accreditation any easier to achieve.

What makes this move interesting though is that it positions Google one step closer to taking a role as an ad-exchange, since they are now able to broker out your advertising space much more widely (and obviously place ads too should you want).  As most other ad-exchanges seem to fail to effectively communicate their position this puts Google in a very strong position, particularly with their reach into the longtail… I can’t help but wonder if the next move will be for them to flip this around on its head and open up the third party networks to advertisers for management through their interface.