Is Google entering the ad agency biz?
John Battelle thinks so, and who knows the mind of Google better than he does? (Okay, Messrs. Brin, Page, and Schmidt probably do). Battelle’s Searchblog cites an AdAge story about one of ours, O&M’s New York office co-president Andy Berndt, leaving for Google “where he will helm a new global unit dedicated to collaborating with marketers, agencies, and entertainment companies.” (The AdAge story says that an Ogilvy spokesperson has confirmed the departure, but adds that Ogilvy will “continue to be led by its strong management team.”)
Does this unit qualify as an agency? AdAge thinks so: “…any unit offering creative consultation and account services could be considered [an agency].” And Battelle is even less equivocal: “…the trend is clear. Google is setting itself up as a full service advertising company. And that means client services and creative innovation.” Not long ago, Sir Martin Sorrell spoke of Google as a “frenemy” to WPP (and presumably to the other major communications groups). Anyone else see the letters ‘f’ and ‘r’ fading fast?
We live in interesting times indeed.
Please note: Opinions expressed in this post, as on all posts appearing on this blog, represent the view of the writer and not an official Ogilvy or WPP viewpoint.
4 comments thus far
Google entered the digital advertising business in 2002 when it launched Adwords. While digital advertising has grown, it is still held back by issues such as click fraud.
Traditional advertisers have had their growth slow because of the shrinking and fragmentation of the media market, and because many agency people still do not understand the digital market. In some ways, traditional advertising is like the music labels in 1999; they don’t understand digital advertising’s business model, and by the time they do understand it, it will be too late.
Google’s foray to become an ad agency represents an attempt to combine traditional and digital advertising under one roof, and to do it better than the 4A agencies, which are fighting a rear-guard action to protect their shrinking and fragmenting traditional advertising market.
Google and the 4A’s are coming from opposite directions, but the trend is on Google’s side.
Posted by Paul Denlinger on September 19, 2007 at 1:14 pm
Sure, many people in 4As don’t understand the digital market. And sure, we’re like the music labels before ubiquitous burners, MP3s, and P2P changed everything. But people in this forum are mostly either those who do get it, or understand the urgency of understanding it. And while I don’t want to toot Ogilvy’s horn too loudly, I do believe among agencies we’re not particularly ossified, and we’re moving in directions which, if I could talk about them publicly, would genuinely surprise you.
Posted by Kaiser Kuo on September 19, 2007 at 1:53 pm
@Paul There is no doubt that AdWords is playing a role that was traditionally played by agency media buyers. No doubt either that Google is (much less successfully) trying to extend that model to traditional media, like newspapers and TV. Google believes its algorithms can do media buying and ad placement more effectively than human media buyers, can especially in the long tail. They are probably right.
Will that kill the agencies, or even their online branches? No way. Media buying is just a part of what agencies are doing. A small part, even for their online teams.
Does it mean agencies need to think about how they do business and ad value to their clients? You bet!
Posted by Cognito on September 19, 2007 at 11:11 pm
Here is a great article covering the topic. One of the most interesting point made is this:
“You don’t need to go into a fixed budgetary cycle,” Armstrong argues. Instead, advertisers must learn how their budgets fluctuate with consumer-interest cycles
Now that is an idea to change the agency world.
Posted by Cognito on September 21, 2007 at 11:23 am
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