Google attempts to square the communications circle

In less than ten years, Google has mad the astonishing journey form non-entity to the world’s most valuable brand. So what’s it going to do for an encore?

There’s an oddity about the story so far. Google stands for search, and search represents a tipping-point communication history propelling us towards a transformed environment, where the pivotal player is the information-seeker rather than the information producer, and where the content (and timing) of the information that matters is defined by the information-user, rather than the message-sender. Search is, therefore, sweeping the rug from under the feet of traditional advertising/ mindsets, skillsets, infrastructure, processes and mechanisms, business models, business relationships. The lot.

However, while this is the case in theory, so far there has been little evidence of it in practice. Instead, we’ve had two different worlds divided by a Berlin Wall that kept them firmly apart. On the one side, the world of search advertising, inhabited primarily by a long tail of smaller and medium-sized businesses for whom traditional mass media was never a viable option. This was a completely new market for both these smaller advertisers and consumer searchers. It’s Google’s home territory.

On the other side, the world of big, who have carried on doing big advertising in big media, using big advertising agencies and big media-buying groups, as if nothing had changed – untouched by events on the other side of the dividing Wall.

Then Google did a strategic review. Chief executive Eric Schmidt explained it thus at an industry conference in San Francisco in April. Google looked at text ads (its traditional core business), at online display, at offline TV and radio advertising, and asked what would happen if you put them all together? What would “the advertising customer” like?

Schmidt’s answer: “What they would like is a single way in which they can see ads and then have the computer do the allocation for them” (where, of course, Google is the single platform for “the single way”).

Google has been chasing this vision with a vengeance. It is experimenting with applications of its auction-systems for the buying and selling of traditional radio and TV advertising inventory. It bought YouTube, which, of course, is driven by entertainment, images and video, rather than text and information. It developed Universal Search, where every time you enter a search term, it not only finds you text documents, but images, video, books, and so on (the potential pay-off: the ability to search for and deliver relevant “display” editorial content and advertising, as well as text).

Then came the mooted acquisition of DoubleClick – a leading player in the online display advertising space. If the deal goes through, DoubleClick won’t only deliver strengths where Google’s was previously weak (display), it will also add another arrow to Google’s ad-serving bow: the ability to connect search data to behavioural targeting data.

On top of that, there is personalised search. If you type the term “marketing” into Google’s search engine, it will give you 491 million references in less than one quarter of a second – a breathtaking feat. But how many of those 491 million references will you read? And how many of them really address what you were looking for?

Personalised search is Google’s answer. An opt-in service, it remembers your personal search history and serves up answers that relate to that particular history, rather than that of the population as a whole. Just imagine what you could do if you combined this with DoubleClick’s data on the history of which websites you visited, and which pages you looked at.

Now imagine if these currently separate initiatives were seamlessly combined. We would have a completely integrated video, image and text ad-serving system, driven by a combination of users’ personal search terms and personal viewing habits, with every dot connected by a Google platform, including all the necessary connections between consumers, advertisers and media owners, both online and, increasingly, offline too. In other words, the collapse of the Berlin Wall, with traditional advertising (big media, big brands and big agencies) all sucked rapidly into the search paradigm.

But is it really going to happen? There are some jokers in the pack. Take personalised search. Does Google really need to collect all that personal data to deliver greater relevance? Other Google beta tests allow users to specify in more detail exactly what they are looking for without handing over complete histories of their personal interests. This particular story doesn’t add up, and privacy campaigners (and regulators) rightly smell a rat.

Then there’s a little thorn in Google’s side called Quigo. Google’s model has a flaw. It gives complete control to Google. If you do a deal with Google, everything is done on an aggregate basis. Advertisers get a certain volume of traffic, without knowing exactly where that traffic came from. Websites get a certain amount of income, without knowing who that income came from. Neither side has any say over which ads go where. Some ads and some sites perform really well, others really badly. But neither side knows these details because they are hidden in the aggregate.

Quigo’s ad-serving system allows publishers and advertisers to de-average: to choose only the pages or the ads that really deliver the goods, and not to bother with the rest. It addresses media-owners’ suspicion that their websites and pages are far more valuable than the average represented by Google auctions. And it feeds brand-owners’ desire to control where their ads get displayed.

So successful is Quigo (latest coup, a $100m (£50m) deal with Time Warner) that Google has recently introduced “me-too” Placement Performance reports for advertisers, plus pay-per-action (rather than pay-per-click) payment models.

Which takes us to a crossroads – if Google manages to fend off Quigo and introduce Placement Performance as a modus operandi for big brands and big media-owners, it will be close to joining all the dots for a complete revolution in the buying, selling and placing of advertising.

There are still many jokers in the pack, including the sheer technical difficulty of doing it, inevitable controversy around personalised search, fears of the implications of a DoubleClick/Google tie-up, and new challengers, such as Quigo. Either way, however, the Berlin Wall between traditional advertising and search is now crumbling fast. Right now, the situation is incredibly fluid. But the patterns for tomorrow’s advertising and media-buying status quo are being set. Where do you fit the new pattern? 

Alan Mitchell, www.alanmitchell.biz