Google is entirely a product of today: it’s hugely successful, breathtakingly ambitious and has no experience (so far) of failure.
It also seems to be the unique company on the planet to worry Microsoft. Before the success of Google, Microsoft had only to worry about governments, not companies. Now, though, whenever Microsoft looks to drive down a new road, that young upstart Google is already there or very visible in the rear view mirror. So, as I said last month, it pays to Google-watch.
Google is offering more and more services for advertisers (and agencies). September’s appointment of the co-president of Ogilvy New York to run a new division merely formalised a trend that was clear even before the acquisition of DoubleClick earlier this year.
In the meantime, Microsoft has acquired aQuantative (Avenue A) and has more recently taken a strategic stake in Facebook. Clearly, such activity blurs the line between buying and selling – but how new a development is this?
Media owners have been quietly building their client services for years due to frustration with many agencies’ reactionary attitude to anything new. Google doesn’t do stealth, it tells it like it is – it knows no other way. This again reflects reality: clients want work to be high quality, fast, very economical and measurable.
“Fast and accountable” is precisely the culture of digital agencies. It should be no surprise that an advertising agency is able to produce good TV work. But the fact that it can only do so very slowly and expensively is rapidly losing its appeal.
I certainly don’t buy the dangerously smug response from a US agency director quoted in Ad Age in August: “Google (and Yahoo!) are never going to have the relationships and credibility with advertisers we have”, he said. “We can also bundle (internet solutions) with our print products and they can’t.” We’ll see.
This spring, Eric Schmitt, the chief executive of Google, said, “We don’t know enough about you”. Considering their business model, technological prowess and the fact they’d just bought Double-Click, this sent a shiver down many a spine. Putting aside ethical issues and how they use that information, the fact remains that Google knows more about the consumer than any ad agency or research company. Google has proved it has the ambition, technology and talent to turn data into actionable information and consistently make a lot of money in the process.
Finally, everyone can become a media owner now, and many seem to be trying. Microsoft chief executive Steve Ballmer, has made it absolutely clear that he aims to be a global media owner. Microsoft has made many claims before about its aspirations, but it has found it extremely difficult to succeed in a major way once it steps outside its core “Office” competence. MSN is hardly a failure, but its performance looks positively pedestrian alongside Google.
So now the game has become a lot more difficult. Microsoft has a huge digital competitor with almost as deep pockets, but with a different business model and an open source strategy, offering services for free because it is funded by advertising.
Google’s attempts to move into “old media” have been much discussed, but arguably more important are the opportunities in the mobile phone market. This is rapidly becoming the main communication medium for under 35-year-olds – ahead of the PC which, in turn, is more important to them than TV. Ten years ago, who would have thought that TV would be so far down the pecking order?
As an ad medium, mobile is still insignificant, but this highly personal medium looks set for a breakthrough in the near future, due to the ability of sophisticated search engines to serve highly relevant messages on a one-to-one basis.
Is this a gift-wrapped opportunity for Google? It is offering open source technology to an impressive list of software, hardware and distribution partners, and is looking to make its money ultimately from advertising. But the stakes are so high and the competitors are of a tougher standard than it has come up against before, so success is by no means guaranteed.
At the other extreme, the new-media owners don’t have to be giants – far from it. Any consumer or group producing or reformatting content and distributing it qualifies them as “media owners” – be it a newsletter to a new local society or an online social network growing at half a million members each week.
It’s great that we are in an era of “peoples’ media” – the internet has forced this genie out of the bottle and it’s not going back. However, you can expect the fortunes of these social networks to rise and fall dramatically. Their culture is different from Google’s, which is obsessed with return on investment and which claims it has made money out of everything it has tried.
This blurring of boundaries would have created a furore years ago about issues of “objectivity” and “conflict of interest”. Now, I don’t think many care. Pragmatism rules the day: “Does it do the job? Can I have it fast and cheap? Well, let’s get on with it then”. Welcome to the digital world – the world of Google.
Chris Imgram: email@example.com