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3 reasons for agencies NOT to fear Google

3 reasons for agencies NOT to fear Google Jim Meskauskas

Google has been in the trade press -- and the mainstream press -- an awful lot lately, with words of peace and love. It has been trying to allay the fears of the agency community that it -- Google -- is not after their business. Google is starting to find it necessary to say the same thing to print, broadcast and other ends of the media business. But beware of those who act like the enemy but speak words of friendship.


Let's face it, when someone keeps letting their kids play in your backyard while they stand around talking about ideas for remodeling your house, it is hard not to get the impression they are looking to move into the neighborhood.


While Google's management consistently insists that they aren't after the agency business, the truth of the matter is that they kind of are. Google needs to find more revenue, and expanding its offerings to include more media is the only way to do that at this time.


Something like nearly 99 percent of Google's revenue comes from search. While there are still plenty of dollars to be had from new search budgets coming into the marketplace and growing search budgets already in the market, Google is going to have to find newer, more diversified revenue streams if it is ever going to find long-term justification for the company's current share price.


But agencies have less to fear from Google than they realize. Agencies have other things they should be afraid of, some of which I've discussed in this column before. 


Here are three reasons agencies should not fear a Google incursion:


1) False disintermediation. One of the grand illusions Google offers when it comes to buying non-search media is the notion that you, the advertiser, have direct access to the media you are buying. The truth is that you are simply going to be granted direct access to a machine that will help you buy the media. There is no question that Google's technological innovations (taking Ted Meisel's idea of auction-based, CPC-priced search listings and marrying that to a better search engine) have forever changed the media world. But when it comes to buying media, all they really offer is an exchange of one middleman made of flesh for one made from machines.


2) Machines are for transactions. Humans are for thinking. Google has been, is now, and likely will be for a long time to come, a technology company. Advertising and marketing, while more reliant than in the past on technology for the sake of transactional efficiency, are "people" industries. 


Google faces the same obstacles getting into other media as Microsoft has by expanding beyond software. The very DNA of the company is antithetical to the other kinds of businesses that it hopes to gain entrance to. Google's top-down belief that all solutions to all problems can come from excellent engineering is both idealistic and filled with hubris. If technology and engineering were the answers to all the questions, most businesses would consist of a machine, a dog and a man. The man would be there to feed the dog and the dog would be there to keep the man away from the machine.


So much of marketing and advertising relies on ideas, (seemingly less so these days, but still…) and only humans have those. None of this is to say that Google can't use its vast resources to hire those people -- and it very well may -- but it is going to have to commit top-down to the notion of a human endeavor. And this means being willing to go anywhere for talent, not just the Ivies. As Gasteau wrote in "Ratatouille" -- Anyone can cook!


This is the kind of inventiveness that is necessary for a creative, human business.


3) Inherent limitations of the media exchange model. What Google offers the marketplace is exceedingly valuable. It offers an automated, democratic system for pricing and purchasing (and then placing) media. The problem, however, is that it does so only for that media which is of indeterminate value. Auctions are very good at establishing market rates for inventory that is exceedingly rare. They are good at determining the value of inventory that has previously remained "unpriced" (i.e., unsold or remnant). But these are two very different kinds of inventory, at two extreme ends of a spectrum, neither of which make of a majority of the marketplace. One end of the spectrum is highly restricted, and the other, plentiful. But the bulk of marketplace desire lies along the curve of the bell. The selection of this inventory, its pricing, its purchase, and its ultimate placement relies on strategizing, planning, negotiating and communicating -- all communal human activity.


The younger generation of human resources in our companies might prefer the more automated way of the machine, as it limits their contact with live persons -- a result of a technologically oriented, solipsistic upbringing that is a vast subject for another forum. However, machines are only good at solving puzzles. You need people to help you solve mysteries.


The other limitation of media exchanges is the eventual need on the part of the advertiser for transparency. There are certainly oodles of dollars being spent by marketers who don't mind where their media runs, so long as it yields the response they are looking for at a cost that turns a positive return on investment. But there are LOADS of advertisers who do care where their ads run and wish to have some control over that. Out of a concern for compromising the integrity of their open cash marketplace, most publishers will not -- do not -- allow their participation in an ad network or media exchange to be made public. 


Google may have some success with some websites, but it is going to be a long time before ESPN or People magazine let their inventory be offered up on a media exchange, publicly, open for auction, and looking like distressed inventory.


So, yes, agencies, Google does want to get in your kitchen. And, yes, you do have something to worry about. But the two are not directly linked. So for now, the kids are still going to eat what you put on the table. But they might start taking a sniff at what's in Google's pot.


Media Strategies Editor Jim Meskauskas is vice president and director of online media for ICON International, Inc., an Omnicom Company. Read full bio.

Jim Meskauskas is a Partner and Co-Founder of Media Darwin, Inc., providing comprehensive media strategy and planning.  Prior to that, Jim was the SVP of Online Media at ICON International, an Omnicom Company, where he spent nearly five years.

View full biography

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