Summary:

Although Omnicom, the world’s largest ad holding company, already spends many millions of dollars worth of display ads through Google (NSDQ:…

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Although Omnicom, the world’s largest ad holding company, already spends many millions of dollars worth of display ads through Google (NSDQ: GOOG), a new agreement between the two guarantees that the amount will grow significantly higher. It also suggests that Google may realize its goal of making display a $1 billion business more quickly than expected.

The terms of the deal, first reported in the WSJ, which cited unidentified sources, calls for Omnicom to spend an unspecified amount of its display campaign dollars through Google’s ad exchange. In return, Google will provide Omnicom and its clients with data about how well its display advertising is working.

In addition, paidContent has learned that the deal is global. And by buying display inventory through Google’s exchange, it will also represent a major boost to the revenues of YouTube and Google’s partner sites.

The deal is completely open-ended from both sides; Google can, of course, continue to work with other ad holding companies — former ‘frenemy’ WPP Group has warmed up to over the past few years, and the search giant has a long-standing relationship with Publicis Groupe. Likewise, Omnicom is not prevented from selling its ads across the display pipelines belonging to Yahoo (NSDQ: YHOO), AOL (NYSE: AOL) and Microsoft.

For the ad industry, the deal demonstrates the huge changes taking place in the way display media buys are handled by the major ad agency holding companies. As Omnicom has created its own trading desk alongside rivals like Publicis’ VivaKi and IPG’s Cadreon, Omnicom Media Group will get further assistance on its bidding platform courtesy of Google. In addition to the analytics of Omnicom’s display campaign performance, Google will handle training and share marketing duties.

In terms of the breadth that the search giant can bring to Omnicom, Google claims to have 75 percent of the top 20 ad networks on AdX, as well as all AdWords advertisers. On the sell-side, it has over 100 major publishers, as well as more than 1 million AdSense publishers.

Earlier today, Google published a blog post on its DoubleClick site claiming that the targeting and efficiencies of the auction and exchange process provide an average CPM lift of 136 percent compared with “fixed, upfront, pre-negotiated sales of non-guaranteed inventory.” With this Omnicom deal, Google’s display efforts, which also include the recent acquisition of demand-side platform Invite Media, just got some more lift.

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By David Kaplan

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