NEW YORK (AdAge.com) -- A month ago Dennis Woodside was running Google's U.K., Ireland and Benelux business out of London, thinking that's where he and his family would be for at least a few more years. But that was before Tim Armstrong, Google's president-Americas Operations, decamped for AOL and Mr. Woodside was tapped as his replacement, to run Google's business in the Americas region. Since then, he's spent a week in New York, then California and then back in New York. Next week you'll find him in London. And after that he'll start the cycle all over again -- a schedule he'll pretty much live by until his family moves to the U.S. in July.
Mr. Woodside's role in North America will be both an operational and a relationship one, trying to cement its status as a place big marketers can go for branding campaigns and, in the process, monetize its display inventory. To do that, he'll have to work closely with the big agencies that in the past have had hot-and-cold relationships with the search giant.
"We've had a very constructive relationship with Google in Europe and Dennis has been a positive influence in that," said Nigel Morris, CEO of Isobar, a digital-agency network. "But in the U.S. there are a number of agencies that are cautious about Google, especially in relation to its owning DoubleClick. ... His task is to make sure he's clear, open and constructive with agencies and clients."
Search Giant Google Makes Its Case for Display Advertising
Looks to Lure Additional Advertiser Dollars to Its Expansive Content Network
While he was in New York recently, Ad Age caught up with him to learn a bit more about how this Googler, who is relatively little known domestically but has become one of the most powerful U.S. digital-marketing executives, plans to approach that.
Ad Age: This was a pretty interesting move -- give us some color on it.
Dennis Woodside: Well Tim apparently decided to go to AOL and announced on a Thursday that he'd be leaving. So I got a call over the weekend, hypothetically asking would I be interested in this, that and the other thing. And by Tuesday, Omid [Kordestani] and Nikesh [Arora] and others had made a decision and asked if I'd get on a plane and address the team tomorrow morning with Tim. So I did.
Tim and I had worked together when I was based in the U.S. four years ago and from that point on I kind of looked to him as a leadership example. When I was in Europe we stayed in touch and I stayed in touch with his team, people like Penry [Price], and so forth.
Ad Age: What have you been doing your first few weeks?
Mr. Woodside: I've spent a lot of time listening, both to people in Google and in particular the agency community, the associations and some selected advertisers. I'm trying to understand what are the perceptions of Google. Tim did a fantastic job of building this business, from scratch, and I kind of walked into a fantastic situation. It's like the coach of the Yankees -- I don't even know if the Yankees are any good anymore -- but it's like the coach of the Yankees decided to leave and I'm trying to walk into the role.
Ad Age: So what perceptions did you hear?
Mr. Woodside: I think overall we have fantastic relationships -- we've had more time here than in Europe to establish deeper relationships with both the agency community and advertisers. And I think our teams have done a great job developing industry expertise that they can bring to a pharma or technology advertisers. There are lots of good things to build on.
What might I want to bring from Europe? Well one thing we did because of the nature of the business there is we had a fairly strong and deep program with the big six agency groups. ... bringing a bit of that to North America will be a priority.
Ad Age: You've had programs like that in the U.S. already, with people responsible for reaching out to holding companies like WPP or IPG. How does this change that?
Mr. Woodside: It's stepping up what we're doing. It's adding more structure and resources. The teams that serve the agencies now, relative to our overall business, are fairly small in number. It's making sure we have the right number of people focused on that community. ... The agency program is relatively new in North America.
Ad Age: You're a relative unknown on Madison Avenue. How challenging is that?
Mr. Woodside: People on our team are well known and we have very strong players in this office and throughout the Americas. I think the reason I was chosen was I was working in the U.K. and prior to that I was responsible for starting up operations in places like Russia, Turkey, Israel and Egypt.
The U.K. in some ways is one of the most advanced markets in the world when it comes to digital. About 20% of media spending is online in the U.K. Partly that's the presence of the [non-ad-supported] BBC, which almost forces advertisers to be more innovative in how they reach an audience. But that places certain challenges on the agency community -- how do they adapt their business model to such a high degree of penetration and demand, as well as advertisers -- how do we get a message out in that environment.
What we were able to successfully do in the U.K. is establish a clear voice in the market for the role of the internet in the communication mix. We worked with very large advertisers like O2, Vodafone and Marks & Spencer to help them move into that world. I think the decision was there's a strong set of relationships that already exist with the likes of Penry Price and Eileen Naughton, here's someone who can help us face similar challenges in North America. I don't think there's a sense that there are massive things we need to do differently with our team.
Ad Age: WPP has talked a lot about Google as "frienemy." Does that hurt you?
Mr. Woodside: I think we are friends. ... At an operating level we're doing quite a bit together, we've got a university program here. We're looking forward to being better friends.
Ad Age: Many agencies viewed your predecessor as an advocate within Google. They don't know you. What kind of a challenge is that?
Mr. Woodside: Tim's shoes are very big. And I learned in Europe a lot about the challenges facing agencies and how we can help productively and understand what we can and can't do. When I started in the U.K. it was 2006 and we had very much gone through a massive growth spurt, the business went from nowhere to several hundred million in revenue very quickly. One thing we hadn't done was spent the time to understand the agency communities concerns and business models, the way they work with clients media owners and tech companies. ...
Now we're doing things like matching up TV-commercial schedules with search behavior and say you ran this ad for Product X on Wednesday at 10 and here's what happened on Wednesday at 10 with Product X. A big theme in Europe was how does it all come together. When people see a TV ad, do they go to the store, go online, research more? When they search are they more conducive to going into the store?
Ad Age: Almost everyone I talked to about you described you as an operator. Do you think that's an asset that Google particularly needs right now?
Mr. Woodside: Everyone has different strengths. Mine is I like to help a team get to where it wants to get to. In Europe we built a great team. ... Working at Google there's a lot of ambiguity, things change a lot and that's different and takes people who are open to frequent change. My job was to set broad direction and make sure we have the right people doing the right things and let them go [for it]. And that's what I'm going to do here. Whether you call that operational or organizational or whatever, that's what it is.
Ad Age: What specific challenges do you see in the U.S. for where the internet ad market is going?
Mr. Woodside: Most people's experience with the internet has occurred in the last seven or eight years, and most people in the U.S. have only had broadband for the past five or six years. So people are still adopting these products and services at a very high rate. And it's hard to keep up. It's hard for an advertiser or agency to know, "How do I adapt my model fast enough to reach the consumer at a relevant point?" Google sits at the center of that to some degree.
Our products and services can be helpful but there are many other products and services that an advertiser can think about. Our job is to help them navigate this digital world and think about reaching that consumer who's reading an article in the New York Times one minute, going to Facebook the next minute and searching on Google the next. It's not a Google challenge. It's an industry business challenge that we can help them work through.
Ad Age: Do you need to have a different kind of relationship with marketers to figure that out?
Mr. Woodside: With Google in North America, there's been waves of growth. In the early days, around 2002 and 2003, our clients were other start-ups -- they were e-commerce players. And then there was a wave of growth where those start-ups got big, like an Amazon or an eBay. And now if you look at the advertisers who are getting more serious about digital, it's the GMs, the Toyotas, the Sonys and Samsungs of the world. That's where we can play a bigger role and spend more of our time.
An agency is critical for the communication strategy for that kind of brand because it's such a complex brand and complex set of products with many different objectives. And we need to partner with the agencies to help them understand the various digital opportunities.
Ad Age: Omid [Kordestani, senior VP-global sales and business development] said on Thursday's earnings call that small and medium-size marketers look at Google as a sales acquisition channel, while the big guys see it as a marketing expense, which get cut in a recession. How do you shift that conversation?
Mr. Woodside: I think it's shifting. If you're talking to an advertiser who's selling something online, physically shipping a product like a Best Buy [might be], I think there's a very clear understanding of what digital can do for the e-commerce side of the business.
But think about your own behavior as a consumer: I'm going to be in the market for a car, so where do I start my journey? On the internet, researching, looking for videos on an auto manufacturer's site, on YouTube, maybe I'm in a forum where I'm asking other people's opinions about cars. The way people are making their decisions is changing and for Google the opportunity is to help advance that dialogue. And there's also a science we don't have all the answers to. How does online media consumption affect decisions as to where to shop? And when you go to a story, what do you actually purchase? That's not a closed loop, we don't have all that information yet. And that's exciting and interesting for us.
Ad Age: The Google search business is humming along pretty well -- but what other parts of the business do you need to focus on?
Mr. Woodside: What we're doing in the U.S. on television is very interesting, taking a layer of technology and applying it to TV to give the advertisers and agencies a level of tracking they didn't have. For example, you can put an ad through Google's TV program and test a red dress in the creative vs. a blue dress and see which commercial gets play through and which one consumers switch off. If I knew the red dress was more interesting to consumers I might think about my product development or my distribution or my inventory differently.
Ad Age: You think TV ads will be a big business for you guys?
Mr. Woodside: We definitely think that.
Ad Age: What are your other priorities?
Mr. Woodside: Display advertising on the content network is starting to come into its own. We've launched a number new targeting technologies for display and that's going to improve as we learn how to target advertising.
YouTube is a huge opportunity. ... Like a home-improvement channel is a good example for a place a Home Depot can go for advertising. We're going to continue to see TV come into the web.
Mobile is the other one and I saw a lot of that in Europe. It's really starting to take off. Consumers are using their phones to search the web and the advertising in that medium will be slightly different but incredibly targeted because you can add geo-targeting as well.
Ad Age: One macro theme we're seeing is marketers doing things on the web that don't involve paid media -- social-influence marketing. And as more money shifts to these executions, sometimes at the expense of paid media, would this trend change the Google approach to revenue? Would you ever start charging for more consultative services?
Mr. Woodside: No. Broadly speaking, we're big fans of the internet. All these avenues of communicating with the consumer are valid and there's a role and a place for all of them. We're not going to be in the consulting business because that's not what we do. We build technology that's scalable and my team's role is to help people take advantage of that.
Now we can have a conversation to help them think about social media, blogs, YouTube, but our job is to help them identify options and then the agency. Our view is we have a compelling product that can help connect advertisers with consumers in a compelling way -- whether they're looking for commercial information, social networks, maybe even looking to engage with brands in a social network or social context, that's what search can do, what YouTube can do and what display can do.
Ad Age: How does the social web affect your product offerings?
Mr. Woodside: You've got even more fragmentation of the web and consumer usage shifting form the big portal-esque sites to the tail. We have research people actually looking at more sites per day than they did a few years ago -- their interests are becoming more diverse. A lot of those sites are in our content network and you can serve an ad to those people that can be very targeted to their interests, expressed interests or the content of the page.
Ad Age: Google is the most admired consumer brand but over the past year the target on your back keeps getting bigger -- you've been blamed for everything from the dissolution of value of online content to violations of privacy when the villagers of Broughton in England revolted against your Street View camera car. Do you worry this will affect the Google brand?
Mr. Woodside: Google is focused on products that work for consumers. And you think about Street View launching in the U.K. There was concern in the press. But most of the newspapers in the U.K. have comments and if you look at the comments on the story, about nine out of 10 people were like "I read the article and then I tried the product and wow -- I really like it." So people find the product engaging.
I think as a society what we're wrestling with is the technology that's available can do some really interesting things but it's very different from what we're used to and the technology -- not any one company -- challenges how we think about think. And what you're seeing is a dialogue about how it's going to work. And I think that's healthy. Maybe consumers are telling us something about what their expectations are and they're different than what professionals think their expectations should be.
Ad Age: Prior to the U.K. you spent lots of time in emerging markets -- Russia, the Middle East. How has that influenced you?
Mr. Woodside: I love new stuff and I'm really passionate about developing markets. I'm excited I have a significant amount of that in the Americas -- I'm going to Brazil in June. And one thing you can lose sight of here is how technology is changing lives around the world. In Turkey, even four years ago, there were 20 million people on the web. And it's sort of between western and eastern values so to speak and you can see how the internet is changing people's lives and changing how they think about censorship and how they think about communicating inside and outside.
I'm excited that many of the world's global brands are based in the U.S. and they are facing challenges [in emerging markets]. In Brazil there's an emerging middle class and in the past the way people's views of brands -- what soap to use -- was formed by billboards, outdoor, maybe word of mouth. Now people are texting each other -- "What is this soap thing, which laundry detergent should I use because I've never used it before" -- and you think of how technology will influence how those societies evolve and that's pretty exciting.
Ad Age: One thing everyone seems to know about you? You're a triathlete.
Mr. Woodside: I was training for an Ironman [triathlon] in November but we'll see. It's a little tough to train right now. My children are in the British school until July and then the plan is to move over immediately after that and my life will be a little less hectic and maybe I can get back to training.