Search giant shapes the future for digital Britain

As the pace of digital development gets ever faster, Google’s UK chief explains how he is at the centre of shaping your online future.

Earlier this month entrepreneur and former Channel 4 chairman Luke Johnson attacked Google for being a bad corporate citizen, avoiding paying taxes and killing off the content production industry.

Criticism is nothing new to an internet giant that has cornered such a large slice of our culture. Indeed, Google comes under regular attack for, among other things, the secretive nature of its dealings with our personal data.

Matt Brittin, managing director of Google in the UK and Ireland, its second largest market after the US, seemed determined during our interview to defend Google’s position and address as many of these accusations as he could in an hour.

Brittin’s favourite topic of conversation, however, is the benefits business and consumers can gain by embracing the internet fully.

He peddles the view that Google is a helpful brand for business, not a hateful one. Brittin admits that his main role is one of education on how businesses can benefit from the internet. In this he is well supported by Google’s US management and will continue to be following the announcement last week of a reshuffle of the company’s leadership.

Google co-founder and chief executive-elect Larry Page is often in the UK to support this market, as is outgoing CEO Eric Schmidt, who Page will replace in April. Schmidt, in fact, was here in the UK as Marketing Week went to press, no doubt preparing for his new role as executive chairman with the new responsibilities it will afford.

Small businesses that heavily use the internet to do business grow four times faster and create double the amount of revenue than those that do not

Brittin says: “Eric, Larry and Sergey [Brin, Google’s other co-founder] have been discussing these changes for a long time, and over the [Christmas] holidays they agreed now was the right moment to make them.”

Brittin’s role as educator and his commitment to speedy innovation are priorities that the new management structure will continue to take seriously. “Larry will focus on product development and technology strategy among his day to day responsibility for managing Google,” says Brittin. “Eric, whose results as CEO speak for themselves, will become executive chairman and will focus externally on deals, customer and business relationships, government and regulatory issues in addition to continuing to advise Larry and Sergey.” Brin, he adds, is going to work on “a small number of strategic projects, in particular new products”.

But as the figure responsible for Google’s growth in the UK, Brittin retains an unswerving belief that marketers can reap the most benefit from Google’s efforts. Brittin’s rallying cry to marketers is that by imitating his role of educator within their organisations they can increase their influence on growth.

“Marketers are special because they care about the customer as deeply as they do about the business. Digital can give marketers insight that can serve the entire business. With that insight they can get out of the silo and start talking to product teams, sales teams, customer service and the chief executive about what consumers and competitors are doing.”

To allow Google to fulfil its role of helping organisations and consumers use the internet better, whether that is finding information, setting up a website or sharing content, the search giant commissioned Boston Consulting Group (BCG) to conduct a study into how the web is transforming the UK economy.

The study, which was completed at the end of last year, concluded that the internet contributed £100bn to the UK economy in 2009, a figure that equates to 7.2% of GDP, and suggested this could rise to 10% of GDP by 2015.

Brittin claims these findings backed up what Google already knew about how businesses operate online. “Small businesses that heavily use the internet to do business grow four times faster and create double the amount of revenue than those that do not. The BCG report demonstrates how much of a business growth engine the internet can actually be.”

Small business owners make up the “vast majority” of Google’s 2 million advertisers worldwide. Brittin says roughly two-thirds of the search engine’s revenue comes from small and medium enterprises, which is why Google formed partnerships with BT and PayPal among others in 2010 to get 100,000 small businesses online.

There are still an estimated 10 million people in the UK who have never been online, many of them owners of small businesses. But Brittin says: “Small businesses are doing a lot better in many cases than their larger competitors.

“Some have found up to 80% of their revenues can come from outside the UK when they use internet marketing. Institutionalised cultures within organisations can make it a lot harder to encourage large businesses to use internet marketing to its full capacity.”

Google’s relationship with small businesses will only expand if its new Google Offers programme is a success. The launch of Google Offers, announced last week, not only reflects a growing trend for social commerce but also demonstrates Google’s intent to mirror the increasingly social nature of the web (see Q&A, here). It also sees Brittin and his colleagues going head to head with Groupon, the company it made a failed $6bn bid for late last year. Google Offers will operate in a similar way to existing group buying sites by offering daily discount deals on services and products from local businesses.

Among large businesses, Brittin believes retailers are among the best at using digital to drive wider growth. He points out that 50% of the top ten online retailers are traditional offline retailers. “Argos, Marks & Spencer and John Lewis are starting to be genuinely strong online players. They understand the value of the online customer. John Lewis’ online customers are four times more valuable than its single channel customers because of the increased frequency and touchpoints.”

Brittin says he will continue using the BCG study to help drive his mission to convince the world of the still-underestimated importance of the internet. “We want to help government and businesses in the UK see how use of the internet drives innovation and growth.”

He says the report demonstrates the value of ecommerce. Of the £100bn contribution to annual GDP from the internet economy, about £50bn of it is consumer spending on ecommerce.

“We also export £2.80 for every £1 that we import via ecommerce,” says Brittin. “In the real economy, the total economy, we export 90p for every £1 that we import. The UK is a powerful net exporter via the internet.”

Despite Brittin’s aim to promote Google as a vital business tool, its global success has been built on its use as a search engine for consumers. But growth has come at a price. Privacy and Google’s use of personal data have long generated column inches for the wrong reasons. Does Brittin think that we are entering a new paradigm where digital innovation and its usefulness outweighs the importance of concerns over privacy?

“I think it is really important that there is a debate about privacy,” he says. “Anybody with access to the internet can now publish information that can be found by 1.7 billion people worldwide. We all need to think about what we are sharing and what information we make public. We all have concerns about what information is being collected about us and what control we have over that information.”

He adds: “Google tries to be clear about what information we use when you sign up to one of our services. Then we give you a choice as to whether to allow us to use the information. We have something called a privacy dashboard that you can visit that shows all the Google services you are signed up for – such as a Gmail account and so on. You can then scrutinise and change the privacy controls.”

Brittin claims, too, that when Google launched interest-based advertising, effectively its version of behavioural targeting across display advertising, it created another dashboard allowing consumers to see what interests are being deduced for them from their searches. Again it enables users to either opt out of the service or to change those interests.

“This had never been done before,” claims Brittin. “And consumers do look at that stuff. The vast majority don’t make any changes but it does offer visibility, transparency and control that we think is important.”

But the viewpoint that Google is a helpful transparent giant is not necessarily widespread, and Brittin spends much of his daily job repairing Google’s bruised reputation in this space. “Many concerns about us or the internet arise because people do not fully understand how we operate or how things work online,” he says. “We think very hard about the quality of the products and services we build. We try to build everything with privacy, transparency and choice at its heart.”

Criticism of Google doesn’t just come from consumer protection groups. Advertisers, media owners and content producers concerned about breach of copyrights regularly air their grievances, as Johnson’s attack in a Sunday paper illustrates.

Again, Brittin is quick to defend Google in each case. He repeats Google’s response to the accusation of tax avoidance, saying that the business complies “completely with the tax laws of all the countries in which we have operations”.

An official company statement adds that Google makes a substantial contribution to local and national taxation and provides employment for about 1,000 people in the UK.

“We also support copyright laws and the right for copyright owners to make a fair return on their work. When we bought YouTube there were concerns – and some lawsuits – over copyright that we completely understood. We’ve worked closely with movie studios and content producers to give them advertising and messaging opportunities around their own content and pirated copies of their content too. They can also now gather tonnes of information about viewers of their content. That audience insight is of great value to them.”

What advertisers need to understand about digital, says Brittin, is its potential as a testing ground. He points out that it is cheaper to trial a new strapline or price point online and observe reaction than launch a TV campaign or trial a new store format in five locations.

Adwords, Google’s core business, allows advertisers to rotate different creative and see what works. Now Brittin says advertisers are increasingly using YouTube to put TV ads up with different music, taglines and edits to see which ones get watched for longer and shared more. “That kind of opportunity is gold dust to a marketer because you don’t have to rely on pure instinct anymore,” he says. “You can combine your creative skills and consumer knowledge genius with science and data.”

Perhaps the most vocal of critics of Google in recent years have been media owners. Led largely by Rupert Murdoch, who has placed his UK newspapers behind paywalls to block Google searches that he believes rip the value out of quality journalism, the debate has seen Google and other aggregators accused of stealing content.

Brittin maintains that successful media owners will be those that deal better with “the mass disruption the internet represents to traditional business models”.

He adds that Google has worked with newspapers to help them experiment with technology that allows them to have content both behind a paywall and also to be found on Google News, which allows people to find news snippets and headlines. “We want to be supportive of the new experimental business models.”

But the bigger point, he says, is that the world is still undergoing a revolution in terms of access to information. He argues that it is difficult to understand the ramifications of that revolution because we are still in the thick of it. “Consumers now have more choice than they’ve ever had. But businesses also have more choice than they ever did in how they reach their customers, whether through search marketing, online display advertising, promoting their content through social networks or with a location-based mobile campaign. Such choice is incredibly disruptive.”

Many business models now require examination, he says. “Take newspapers. They’ve been quite critical of Google, but generally speaking I think they are more critical of the internet, which isn’t going to go away.”