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December 6, 2007, 11:50 am

Google’s campaign to become a one-stop ad shop

By Yi-Wyn Yen

Google has made no secret that it wants to be more than just an online search advertising company. But the Internet giant is finding out how tough it is to break into into the old-media market.

The company’s attempt to roll its online advertising tools into a single, ad-buying and selling system to include TV, radio, and print is taking longer than anticipated. “The offline initiatives have been a real test for us,” said Tim Armstrong, Google’s president of advertising and commerce at a UBS Global Media Conference earlier this week. “We’re in the very, very early stages of connecting businesses. This is a 2, 3, 5-year product that we’re going to work on.”

Breaking into traditional media would be a major coup for Google (GOOG). UBS analyst Ben Schachter estimates that advertisers could spend $500 billion for centralized digital platforms that track both online and offline advertising by 2024. Microsoft (MSFT) and Yahoo (YHOO) are also working on creating similar software tools to integrate across-the-board buying efforts. “We believe that Google is intent on being the early front-runner,” Schachter wrote in a report. “First-mover advantages will be important for the long term.”

Google is dabbling in print and radio, and seems to be making the most headway in TV. In April, Google partnered with EchoStar Communications (DISH) to test selling ads to local advertisers in the San Francisco Bay Area. With the set-top boxes, Google is able to get “second-by-second ratings” and figure out what type of ads match with TV programs based on channel surfing behavior. “Doing better pieces of creative can lead to efficiencies in terms of how ads perform,” Armstrong said. “That feels very familiar to us at Google.”

Google may know how to rule the Internet with its AdWords system, but it faces different challenges on Madison Avenue. Among its biggest problems is learning how to deal with big brand advertisers who are wary about using a system that would give Google access to a lot of valuable data. Armstrong referred to the dilemma as a “process.”

“These are very big businesses. On a basic level, they are testing these platforms,” he said. “There’s a high level of interest, and a high level of work that needs to be done.”

While advertisers may be interested in spending less to sell more, Google still must convince the powerful ad agencies that a digital platform that measures the effectiveness of an ad campaign is a good idea.

Google’s quantitative approach to make agencies more efficient may not be something agencies necessarily want. Agencies creating big-budget campaigns for major advertisers often test new concepts to help build brand awareness. Google’s proposal to quantify that kind of squishy data could make advertisers question an agency’s relevance.

Armstrong criticized those pushing the public perception of Google as a “friend or foe.” He described the relationship between Google and agencies as the “largest friendship network.”

Advertising’s new world order

I read somewhere recently that it’s a battle between Google and Microsoft to determine who will be the next great advertising company in this country. Get serious … who is buying this garbage?

I have been in and around the advertising business for my entire life. In fact, I am a third generation graphic arts designer … only my specialty is digital. My grandfather started making a living in the ad industry in 1918, at the age of 19. His son followed. Both of my brothers and my sister have spent most of their life in advertising as well. My nephew is now attending one of the most prestigious advertising graduate degree programs in the world … and is knocking them dead. Even my 17-year-old daughter has the knack.

The advertising industry demands perfection … and vision. It tries to strike the perfect balance between super creative people, media experts, business and finance people, and account executives. While it sometimes stretches the norm and produces an ad like the infamous Apple attack on IBM, or the sexy new GoDaddy models trying to host your web site accounts, it always plays within the rules. If it doesn’t, you, the consumers, will let them know. You don’t see laws being violated every single day by these agencies … whether they relate to smoking prohibitions, pornography, blatant racial prejudice, or generally offensive materials of any sort. You make a mistake like Don Imus did and “pow”, you’re taken off the air. Your advertisers dump you. And you certainly don’t steal other people’s work. Words … images … music. The ad industry has for the most part learned how to protect its own.

Social responsibility, respect for individual creative skills, and copyright protection have become a way of life in this industry. And now targeted advertising can be delivered to us on the device of our choice (mobile or static) and exactly when we might want to see, or hear, it. How exciting!

But it’s not all about the bucks, folks. Advertising requires a degree of class … sophistication … social responsibility … and an understanding of what is visually appealing and what is not. How many flashing, hopping, beeping, or honking pop up ads can someone watch before the viewing device ends up in the bottom of the lake in a fit of rage, anyway?

What advertisers in their right mind are looking to recruit Michael Vick these days … or better yet, Dog the Bountyhunter or Mike Tyson? Even the slightest hint of cruelty, sexual or racial bias, or lawlessness, can set a concerned advertiser, and its clients, into an uproar. The established rule has always been to avoid controversy at all costs. Let the journalists do their job on that front … not the ad agencies.

The technology industry is entirely different. It thrives on controversy. Whether it’s Microsoft stealing its ideas for Windows from Apple, or Apple stealing its interfaces and designs from HP, they are all roughly the same. It’s always been that way. Try to get away with anything you can until the government authorities threaten to shut you down … or, worst yet, put you behind bars. And if you accumulate enough cash money in the process, you can even fend off the government if you choose.

I know. I went to work for IBM in the mid-70’s. Almost got disinherited by my “advertising” family in the process, but there I went anyway. We weren’t taught creativity much at all in those days. It was more FUD than anything else. For those of you new to the industry, that’s Fear, Uncertainty, and Doubt. “If you don’t pay three times as much for this IBM system you are likely to lose all of your data … and then your wife … and eventually all of your children.” IBM finally met its match in the 80’s and took a dive from grace. They fell asleep at the wheel. I call it “we’re #1 syndrome”.

Then Microsoft took over. Predatory business practices ruled the roost. “Bundle this or we’ll squash you. License us your ideas for pennies or we’ll steal them anyway. Antitrust issues be damned. We are much better pitch men then you folks will ever be.” Never had a company made so much money so quickly. “Hey, this controversy stuff isn’t all that bad, now, is it?”

Then came the 90’s. The decade started off with a strong rumor that a guy named McAfee had invented a cure for the computer virus (Michelangelo) that many thought he invented in the first place. And both the disease and cure spread like wildfire. When I saw him being interviewed by Bryant Gumbel on the Today Show I knew we were in for big trouble. The technology industry has never been the same. These software engineers are sure smart, but should they really be allowed to operate outside the law of the land? I don’t think so.

By the end of the 90’s, the Internet had taken hold. And every two-bit pirate wannabe in the world was now an official “publisher”. You could take your company public by selling air, but stealing other people’s property, selling polluted air, and then recruiting an audience to your party, or new community as they called it, was much more exciting. Business ethics be damned.

The advertising industry was supposed to attend and sponsor this new Interent feast as well, but few quality firms participated at this early stage. Something didn’t smell right. Tell me again why “eyeballs” are more important than “profits”?, a few from the old school would quietly whisper their concerns for fear of being heard and considered to be behind the times. No riches were reserved for dinosaurs in this new world game.

I found it almost too sad to watch as many of our modern day business “heroes”, like GE Chairman, Jack Welsh, and NBC Chairman and CEO, Bob Wright, got snookered by some of these new Internet visionaries, and convinced their advertisers to tag along. They weren’t about to miss out on this new “zero gravity” wave … whatever the heck that meant anyway.

So now the dust is finally settling and Web 2.0 has brought about a new world order. Power to the people. Controversy brings eyeballs and is sought after now, not avoided. Social networking is hot, buying goods via auctions over the Internet is in vogue, and user supplied content is virtually uncensored … in fact, almost all of our norms are starting to change. And the software engineers and scientists out at Google have finally figured out how to dupe Madison Avenue, not just Wall Street, out of all its money … let alone the poor small business out there on Main Street!

Google refuses to follow the standards of objective and straightforward journalism, and guess what … journalism has started to die. Google unilaterally decides to digitize every single book they can get their hands on around the world without the copyright owners’ permission … and guess what … the book publishing industry turns into a steep downward cycle … if not a tail spin.

Newspapers are all selling out, if not giving up. Google pays $1.65 billion for a start up company called YouTube, that, by and large, uses stolen property to attract its customers. Technology companies agree to censor content in China while the Chinese government applauds the fact that its piracy rate is now only slightly above the 80% level. Kids get thrown out of fraternities if they are found actually paying for music or movies they download online … let alone using e-mail. These are no longer socially acceptable practices … or hip.

Obnoxious and intrusive advertising smears all of our online lives. Who produces these pop-up and banner ads anyway? The whole advertising industry has caved into the “science” of it all … and it’s supposed to strike a delicate balance between both science and art. Always has.

Hey, I’m not against progress. I love the Interent and these search engines and what they can do. Used fairly, they can really enhance our lives.

But I don’t want to be exposed to stolen property every time I turn around. Are there really 147,645 companies out there giving away original content that is part of the “public domain” as Google claims? I don’t think so. I’m aware that I, too, have potential liability even as an innocent user of this digital “stuff” I download online when the property is stolen.

I just want to hear the truth. Who owns the content on your website anyway, Google? Do you have peremssion to dsilay and download it? Tell us the truth.

We never had to worry about this sort of thing before. Responsible advertisers would provide me with a shield. I just like being told when I’m about to get hoodwinked. “Bend over … we realize that there’s no water in the shower, but our engineers are working on that one as well.” Semantic water.

Go ahead, technology companies. Take all of the money. You might as well before another country like Brazil, Russia, India, or China (the so-called emerging BRICs) starts to dominate the game.

But please don’t call yourself an advertising company. You’re a delivery medium. Stick to your knitting. We’ve had to solve enough problems over the years … dealing with our own unique blend of greenhairs and greenbacks … on our own!

Long live the power of the honest pitch! Wake up advertising companies … we need you!

George P. Riddick, III
Chairman/CEO
Imageline, Inc.

griddick@imageline2.com

Posted By George Riddick, Ashland, Virginia : December 6, 2007 2:59 pm
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