Digital A-List 2008

Digital A-List 2008: No. 3, Google

Search Giant Strikes Deal With Publicis, and Doesn't Lose Share Upgrading Rivals

By Published on .

Google is not starting an ad agency. Repeat: Google is not starting an ad agency. If there was anything Google wanted big ad agencies to know in 2007, it was that.

Convincing ad agencies that it was friend, not foe, was imperative for Google if it wanted to start snagging the big-brand budgets major agencies control, and the barely 10-year-old company was effective enough in that campaign that it struck a deal with Publicis Groupe to share ideas, co-develop products and exchange employees.
Google VP-North America Sales Penry Price
Google VP-North America Sales Penry Price Credit: Darryl Estrine

"We're bringing Google our knowledge of advertising communications, consumers and client needs," Publicis CEO Maurice Levy said. "They're bringing us knowledge of technology and the world of the web."

Some rivals dismissed the Publicis-Google partnership as smoke and mirrors; others, those who acknowledged it was real, suggested it was like letting the fox in the henhouse. But Google talked about how it could create new technologies and products to help ease certain cumbersome agency functions such as online ad trafficking or local spot buying.

"When we work with these agencies across various functions at Google, we're learning a lot about those markets, what's needed, and what can be improved to make agencies more effective and efficient in this new world of accountability," Google VP-North America Sales Penry Price, who spearheaded the Publicis partnership, told Ad Age.

Google's most impressive accomplishment of 2007, however, was what it didn't do: lose share in search. Google's share was 58% if you go by ComScore, 66% if you ask Hitwise. Both services said Google's share rose in the past year, even as competitors have launched upgrades.

One reason Google continues to grow its query share is its unwavering focus on user experience. That's why Google has actually chosen to reduce the number of ads it shows per page: Running fewer ads in locations where they're less likely to get clicked is worth the improved user experience. And analysts agree.

This year, Google stands to make $16 billion in revenue, much of it in text ads.

Not everything Google has touched has turned to gold. It's had trouble monetizing social-media sites, and the display business has been slow to pick up, though that should be helped by its DoubleClick buy. Experiments with offline media have started slowly but are getting more interesting as it adds granular measurement.

Andy Berndt, whom Google stole from Ogilvy, New York, to head its Creative Lab, has talked about the difference in culture between Google and, well, virtually everyone else. "Google's a giant lab," he said at a conference in January. "It has a fundamentally scientific structure. Sometimes the thinking happens after the doing." He suggested marketers should be similarly experimental. "Marketers who are doing best are trying; they're beta all over the place. They see what works, and they build on that."
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