Google CEO Foresees Advertising, Technology Cozying Up

Google CEO Foresees Advertising, Technology Cozying Up
by Laurie Sullivan
http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=81589&Nid=42154&p=204904

Look for the advertising and the technology industries to grow cozier in a move similar to one experienced by the financial industry during the 1970s.


That's when a set of scientists and mathematicians developed new metrics, and suddenly a generation of employees focused on analytics joined financial firms to maximize efficiencies and profits, Google chairman and CEO Eric Schmidt told attendees at the 90th annual American Association of Advertising Agencies Leadership Conference on Tuesday in Laguna Niguel, Calif.

"There is every reason to believe marketing will go through a similar transition--but the principles of marketing, which are around storytelling, entertainment, targeting and selling--will be augmented by analytical tools," Schmidt said.

The goal for Google is to develop technology that delivers actionable metrics, making it easier for advertisers and agencies to optimize and measure campaigns. More advertisers will have the tools to expand into multiple markets that can test consumer interest in products and services.

Take, for example, Cadillac's click-to-play video ads. The car manufacturer had its ad agency create 13 versions of an ad, testing them in multiple markets to gauge consumer impact and the correlation between viewing the ads and the actual sales. Chrysler allowed consumers to customize the Chrysler 300, but the carmaker did it as content to draw in consumer engagement.

Honda sponsored a concert. Google engineers built technology that allowed concertgoers to ask the band questions and get responses. Schmidt says these will become the defining models for advertisers over the next 10 or 20 years.

For Google, advertising nirvana occurs when the search giant can return the exact answer for each query, accompanied with one perfectly targeted ad. "Eventually, maybe what we can do is guarantee advertisers who pay us money--and this is my fantasy, the sale," Schmidt says. "If we can get to that level of that specificity, advertising will no longer be a marketing expense. It becomes a sales expense."

Schmidt also addressed the challenges of finding ways to compensate content producers and issues of finding advertising content on YouTube when the consumer does not have a specific destination in mind. He acknowledges that financial compensation from one minute of online content brings in much less than one minute on television, but says the solution should focus on creating more compelling and targeted ads that command higher rates.

Nearly 400 attendees signed up for the conference, which runs through today.

Advertisers Look Forward to One-Stop Shopping on Google

Advertisers Look Forward to One-Stop Shopping on Google
by Lee Sherman


SAN FRANCISCO -- Google cast a long shadow over this year's adtech interactive media conference, where the search and advertising giant's recent agreement to purchase DoubleClick for $3.1 billion was clearly on the minds of advertisers and publishers in attendance at the Moscone Center.

Microsoft and AT&T oppose the planned acquisition, saying it violates antitrust law and gives Google a dominant position in online advertising. Privacy groups are nervous about what it means for Google to have access to data on so much customer activity.

But for advertising professionals, the deal, which represents further consolidation in an already solidifying market, has more-positive implications -- starting with the promise of one-stop ad shopping.

"Ninety-nine percent of the ad dollars are going to the top 10 websites," says David Naylor, online media director at Richter 7, an advertising agency. "From a media buyer's standpoint, it makes it much easier to have one point of contact."

Bryan Vickery, a marketing executive at Credit One Bank, agrees, noting that as Google adds display advertisements to the mix, its ability to drive traffic only increases. "As an advertiser, a one-stop shop is extremely appealing," Vickery says. "The question I have for any advertising medium is, 'Can you deliver customers to my doorstep?' At the end of the day they can."

One concern raised by advertisers Wednesday in an adtech panel discussion on networks and exchanges was the rise in user-generated content, such as that found on Google's YouTube. As online advertising starts to take on more of the characteristics of traditional media, advertisers want filtering technologies that can shield their brands from proximity to inappropriate content.

For publishers, the situation is more problematic. Display ads are the bread and butter of large content sites, and they will soon be in the hands of a company known for its programmatic approach to delivering information. Google collected an estimated 30 percent of all online ad revenues in 2006, mostly on the strength of its text-only ads. The DoubleClick acquisition will give it the dominant position in graphical ads, which account for another 34 percent of the overall ad market.

Henry Vogel, chief revenue officer at Quigo Technologies, a Google competitor, says publishers fear that the lack of transparency in Google's AdSense may be extended to display advertising: "The biggest single downside (of the DoubleClick purchase) is that it concentrates more information and control in one company."

Quigo's AdSonar product lets advertisers bid on specific media properties and determine precisely where their ads will end up, in addition to purchasing run-of-network ads. Vogel says Quigo's approach allows publishers to own the customer relationship, something that isn't possible with Google's network.

"Is Google friend or foe?" Vogel asks. "If Google is competing with you for your audience and your advertisers, they now have even more ammunition to do so."