Search giant shapes the future for digital Britain

  • Click here to read a Q&A with Matt Brittin on the changing web
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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.

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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.”

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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”.

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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.”

Q&A The changing web

Marketing Week (MW): With ’social’ becoming more dominant in the way we use the internet, even when we’re searching for the product or service we want, do you feel Google needs a social network offering that works to stop you becoming over-reliant on ’search’?

Matt Brittin (MB): While we’re not about to launch a social network site of our own, we can definitely reflect the increasingly social nature of the internet with our search results. When you search for something on Google you are starting to see Twitter feeds, user reviews and YouTube videos displayed among your results.

Search is still a very powerful part of the decision-making process. The web is becoming more social, but rather than building a direct competitor to Facebook we would prefer to keep innovating in what we’re doing.

MW: So is the Google business not threatened by the seemingly unstoppable rise of Facebook?

MB: I think Facebook is great, a very smart company indeed. I know a lot of people that work there and I obviously know a lot of people that use it. I recently saw the movie [The Social Network] and thought it was brilliant. I actually went for professional reasons and ended up being very entertained.

But I maintain that consumers haven’t finished searching through algorithms just because they can ’search’ through peers and friends. Just like in the real world, you use the web to ask your friends and peers what they’re up to, what they’re doing and what they think about stuff but you also go to experts and you shop around.

Facebook has given people a set of tools to share information and content but search is still a very powerful element to the locating of necessary information. They work very well together.

MW: How then, especially in the face of new competitors such as Bing, do you plan to keep evolving your search capability?

MB: We tend to focus on users and their behaviour rather than our competitors. But it’s great that Microsoft is investing more time in doing search better as it means more choice and means we have to keep raising our game.

In the past few months we have launched [search index] Caffeine, where we rebuilt our back end of search – the bit users don’t see. People now crawl a far larger, richer web more frequently so we had to ensure we could find new stuff more often and bring it to people quicker.

Then there is Google Instant, which saves people time by predicting what their search terms are with every new letter they enter into the search box. Speed is sometimes the forgotten killer application of digital and being able to do things fast is really important. The faster we deliver results and get people off our home page and onto what they are looking for faster, the more useful they find our service.

MW: In what other ways do you see our use of the web evolving?

MB: Thirty-five hours of video is now uploaded to YouTube every minute. We are moving from a web that is principally text-based to one that is much richer. Video allows users to see body language and understand the proper tone of content. It’s much more of an emotional medium. People are participating in video in a way that once only the BBC and ITV could do. Text to video is the next big communications revolution.

MW: You launched Google TV in the US. What is it and can the UK expect something similar?

MB: The intent is to bring the web and TV together. In the majority of UK homes with broadband, people sit and surf while watching TV on at least a weekly basis. We want to put that functionality onto the TV set because currently you have a very smart screen on your mobile, laptop or tablet, but the TV screen is really dumb. You can’t access all the stuff that you can on your mobile, which means sitting quite uncomfortably watching the TV with the laptop open on your legs. Google TV brings the internet to television – apps, full web browsing and an easy-to-use interface. We’ll see how it goes in the US. We would like to get it ready for a UK launch and elsewhere but there is no date yet.

MW: You spent big on a recent advertising campaign for your new online display offerings. Is this a growing part of the Google offering?

MB: We’ve invested a lot of effort in trying to bring some of the science, targeting and sophistication of search into online display. With our ad exchange, we can offer website publishers the real-time ability to decide on which impression to serve to make them most money from their ad space. By offering an auction in the instant that a page is loading, we give the best possible return on that space. In old media terms it gives you the best possible yield on your ad inventory.

It gives the website publisher the best price, the advertiser gets better leads and website users receive highly targeted advertising. I think CMOs are starting to get it, but this kind of marketing requires a high degree of analytical skills and digital understanding as well as the classic requirements of creativity, ideas and a sense of what the customer wants.

MW: This time last year Google CEO Eric Schmidt unveiled the company’s ’mobile first’ strategy. Was 2010 the long-awaited year of the mobile?

MB: People talk a lot about the year of the mobile, but I don’t even think we’ve had the year of the internet yet.

If you look at marketing spend on the internet versus time, attention and engagement spent on the internet, we’re not there yet. As for mobile, we’re just at the beginning. The big inflection point comes with the adoption of smartphones and the increasing use of internet on those devices.

We get 30 times more searches on iPhones or Android phones than we do on, say, a BlackBerry or a similar device that doesn’t have a full HTML browser. Marketers have to figure out how consumers are using their mobiles. We know, for example, that one in five desktop searches has a location element whereas one in three mobile searches has a location element.

MW: Android is reportedly the fastest growing mobile operating system. What do you think you’re doing right?

MB: We want to make accessing the internet on your mobile phone easier. When we looked around at people accessing the internet through desktop computers, we observed that browsers were slow because they had been built 10 years earlier when the internet was text based and nothing like as rich as it is now.

That led us to building [internet browser] Chrome. In the year since we launched Chrome, everyone else’s browsers have got better and faster. That’s a win as far as we are concerned because we want people to have a better internet experience.

We made Chrome open source, which means anyone can take the code used to build it and incorporate it into their browser. The same goes for Android, which is about accessing the internet more easily on your mobile phone and making it easier for developers to create applications for different handsets, networks and countries.

Before Android was adopted by different manufacturers and network operators this was difficult. Every phone had a different operating system. With Android we’re trying to increase the range of devices that a developer can use it in.

Marketer to marketer

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Tom Seddon, chief marketing officer at Intercontinental Hotel Group, asks: What do you think are the biggest implications for marketers as the web transforms from something we ’access’ to something that’s just always with us via cloud computing and the increasing use of mobile devices?

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Matt Brittin: There are several things that are now different about the web. It is immediate, it is two-way, so for the first time you can get a mass response from consumers. It is also social so you can use the tools we all have to address somebody that you know is looking for a hotel room right now.

That speed, scale and addressability changes everything for marketers. If you then wrap that up with the fact that everybody now has the entire internet in their pockets, that fundamentally changes the way people make decisions.

We can see from mobile searches that people are looking for things that are near them and available right now.

CV Matt Brittin

  • January 2007-present Managing director for UK and Ireland, Google
  • April 2006-January 2007 Director of strategy and digital, Trinity Mirror
  • March 2004-April 2006 Commercial director, Trinity Mirror
  • September 1997-February 2004 Consultant, McKinsey & Co
  • September 1989-September 1995 Associate director, Connell Wilson

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