Armstrong to Big Marketers: Let's Have a Town Hall

Google Exec Wants a Public Dialogue Around Yahoo Search-Ad Deal

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NEW YORK (AdAge.com) -- Days after Google and Yahoo said they would delay implementation of their search-ad deal that is under Department of Justice scrutiny, Tim Armstrong, president of advertising and commerce-North America at Google, is calling for an open town hall with the Association of National Advertisers.
Tim Armstrong
Tim Armstrong Credit: Scott Gries

"Let's talk about the deal in public ... that's one of the things we're hoping the ANA will get behind," Mr. Armstrong said. "They're great customers of ours, and we'd love to have them understand the deal better."

Not everyone on same page
Mr. Armstrong was fielding questions from Danny Sullivan, editor of Searchengineland.com and an Ad Age Digital columnist, during a keynote at the Search Marketing Expo in New York. While most of the ANA members are customers of Google and Yahoo, there were definitely varied levels of understanding of the proposed search-ad system among them, he said.

The ANA said it wasn't supportive of the deal because it is wary of the long-term effects and its potential to raise prices and stifle competition in the search space. Mr. Armstrong suggested the wariness might also have do with Google's auction system, which treats all advertisers equally, regardless of their size -- something larger marketers and ANA members, used to leveraging their media scale, might not like.

"A lot of companies are used to having pricing power over smaller companies and sometimes the support or non-support for a deal has nothing to do with whether it's Google or Yahoo or the internet" but rather with people making arguments that are in their own best interest, Mr. Armstrong said.

He wouldn't comment on whether Google and Yahoo would go ahead with the deal even if the Justice Department rules against it.

'Black box'
He addressed the issue of transparency -- or lack thereof -- around things such as minimum bid prices and quality scores (both of which help determine how much an advertiser pays for a Google ad). Opponents of the Yahoo-Google search deal have called it Google's black box and suggested that by giving Google more control of the search market it could have power to make changes to those bid prices and scores. The philosophy around those tenants is that they improve end-user quality, Mr. Armstrong said. "We're trying to set thresholds to allow end users to get a certain quality of ads. ... But as we try to define quality for advertising there's a responsibility to provide more transparency."

He was bullish on video search and said that while consumers have adopted it, companies like Google need to get better about optimizing it and figuring out the model.

"Search on video is a really important topic and it has the potential to be AdWords-like in its long-term value to consumers and from an advertising perspective," he said, referring to Google's ad marketplace that matches search queries with keyword ads.

Google TV Ads
He also made a plea for search-engine marketers to use the Google TV Ads product, explaning that he told several agency CEOs last month that big advertisers can learn from the small advertisers that are using products such as Google TV Ads. With that new ad platform, Google plans to sell TV spots based not only on price but on how well an ad performs and has deals in place with EchoStar's Dish Network and NBC Universal.

"SEMs could get into this space and really do a great job because the larger people aren't used to taking the data and really changing the ads," he said.
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