Originally written in 2007 by Brian Wallunas

Background
What started as a research project by Stanford PhD students Larry Page and Sergey Brin, Google has become one of the world’s most recognizable brands and an influence in the media landscape. Founded in 1998, Google now boasts revenues in excess of $10 billion and a market capitalization larger than venerable technology bellwether, IBM. With a mission to “organize the world’s information and make it universally accessible and useful,” Google has broadened its reach beyond paid search into traditional media outlets including newspaper, radio and TV.

Empower’s history with Google began with its flagship product, AdWords. AdWords is Google’s proprietary system to deliver paid text ads across its indexed list of websites—Google.com—when consumers search on keywords. Such an act has spawned a new form of advertising labeled, search engine marketing (SEM). Since then, Empower has become a certified agency recognized by Google for implementing best-in-class solutions. Such a relationship has allowed Empower to participate in beta programs long before they become available to the public, and thus the opportunity for our clients to test new applications. Beta products include but are not limited to Google print (newspaper), radio, and TV.

So is Google a friend, enemy or recently coined, “frenemy”? With its ever-increasing size and entrance into traditional media, it is no surprise that Google’s auction-based platform can be considered a disruptive innovation changing the media landscape. Imagine one platform to manage your media presence. So is Google attempting to streamline the media buying process? Should agencies feel threatened? What does this mean to advertisers? In the following sections we will outline Google’s products and provide a point of view on the aforementioned questions.

Google Digital
At the center of Google is its search engine, Google.com. Capturing over 380 million unique users a month, Google.com is one of the five most popular websites on the Internet and the top global search engine with 66% market share. Indexing millions of websites, Google’s auction based product, AdWords, allows advertisers to bid on keywords and display paid text ads above and along its natural website listings.

Internet search is the second most popular online activity behind email. Consequently, search engine marketing has become an integral part of a holistic advertising campaign because of the direct response nature of the medium. Ads are only served when consumers are actively searching on keywords that are tied to advertiser’s products or services.

Google has since extended its digital offering into display ads across its network of websites, text ads across mobile platforms and more. Opportunities exist to target ads on a geographic, contextual or behavioral basis. Finally, Google is experimenting with different pricing models including cost-per-action, where advertisers only pay when a pre-determined action occurs. Such actions may include a successful sale or registration.

Given the targeted nature of search marketing, Empower recommends a search marketing campaign to compliment traditional efforts. While establishing a Google digital campaign is as simple as a having a credit card and creating an account, Empower brings strategic thinking and thought leadership to the search model. With over 30 active campaigns, Empower utilizes best practices that achieve cost-effective ad placement across the Google network. Our strategic relationship with the leader in search and emerging media not only rewards our clients with access to new products but also account management to provide solutions that compliment other elements of the communication plan.

Google Radio
Google is diving into the radio waters and offering an online buying service for the radio advertiser/buyer. Google has contracted with several different radio companies, including Clear Channel, to provide an online auction service for advertisers. They are currently experimenting with such conglomerates as: Susquehanna, Entercom and Greater Media. With the Clear Channel deal, Google will have access to inventory on over 1700 stations. At this point, they control up to 5% of each station’s inventory.

Google Radio offers several benefits. For starters, the site is easy to navigate. It offers two ways to place a schedule: ‘bid’ or ‘buy’. Bids on schedules can be made and monitored daily or purchased and immediately scheduled. Another benefit is the real-time monitoring of schedules and their delivery. If a station is failing to deliver results, weight can be moved virtually immediately. Also, there is no cancellation fee to discontinue the campaign. Finally, for those clients in need of radio creative help, Google offers a radio production service. However, if you already have creative it is easy to upload your message to the platform.

While the list of benefits is clear there are challenges to the new service. First, utilizing this new method of buying removes traditional business relationships, thereby limiting negotiations and added value opportunities. Such relationships are invaluable to agencies that can turn to station representatives to accomplish technical tasks in times of urgency. Also, inventory is based on supply and demand. Google is not guaranteeing where this 5% inventory will be or run. So the question becomes, will Google have the prime inventory to sell? Even though the current media landscape offers a mix of :10, :15, :30 & :60 second lengths, Google is only selling :30 second spots. A :30 second spot can pose challenges for clients whose message cannot be delivered in that length of time, such as banks with disclaimers.

Overall, this new method of buying presents another platform for Empower to extend its planning and buying abilities on behalf of our clients. For example, Google currently has heavy C&D county coverage, which can be used to compliment a national campaign or benefit clients that have outer-lying locations beyond the immediate metro. Google will not have a significant Metro coverage until the Clear Channel contract is signed later this summer.

Google Print
Newspapers have been trying to reinvent themselves in a time of bad press concerning old formats, declining readership/circulation and modest innovation. In light of this, one of the industry’s most recent innovations is their partnership with Google.

Google Print helps make the cumbersome and confusing task of newspaper buying easier. This platform can be used to place newspaper insertions in 275 daily papers across the U.S. Artwork trafficking, billing and tear sheets are all done by its integrated system. However, the main advantage to Google Print is its rates. Google Print automatically qualifies users to negotiate off the local rate card, which is significantly less than the national rate card. Strategy suggests that you bid aggressively, and while no bid is guaranteed, bids have been made at 80% off rate card.

The principal limitation facing Google Print is its list of publishers. Currently, they are working with 275 newspapers. While this seems exhaustive it does not allow advertisers to reach community or specialty publications, which is often an essential part of a media plan. In addition, if an advertiser already uses/places advertising with a newspaper in a market, they must have been dark for two years before Google Print can be an opportunity. In general, Google Print is an alternative buying tool, but newspaper planning still needs to occur. Empower’s role to provide analysis of the market place, evaluate different publications and help advertisers determine targets, penetration levels and more, will continue to persist.

Google TV
Following a deal with Echostar, Google TV launched with plans to sell TV advertising through an auction based system. In review, advertisers place bids for desired inventory across Echostar, which is available in approximately 12 MM homes on 125+ cable networks. Bids can be placed by network, daypart or program. Similar to the other traditional auction based models, the highest bidder wins.

Although the system in its current design accommodates only :30 second commercials, the advantages of the platform outweigh its limitations. National cable campaigns can have near real time data (24 hour delayed) by creative message, network, daypart and program. The system offers Empower the ability to measure the percent of viewers that tuned to the entire commercial, along with average tune out time (when viewers abort the commercial) and average length of tune (stickiness). In addition to these measures, the system is designed to improve cost efficiencies.

As the industry puts greater emphasis on improved measurement, efficiencies and ROI, Google’s TV ad system is well positioned to play a role in changing the way agencies plan and buy national cable. However, because the inventory is limited to Echostar homes, it will not have a catastrophic impact on how the industry purchases national cable advertising. Empower believes that marketers can use the system to understand how “stickiness” and viewer engagement varies by network, daypart and program. Agencies can then use this information to change how they plan and buy national cable.

Conclusion
In the end, Google’s product offering is another distribution channel for advertising buys, which extends Empower’s buying and planning abilities. While this process may be right for some clients it may not be suitable for others.

So is Google threatening the agency model? In short, it depends. While some may feel threatened, Empower has been proactive to embrace and evaluate Google’s product offering. We have strengthened our relationship with Google, which has resulted in accreditation and first-hand experience with beta products.

Sure, Google’s integrated platform offers efficiencies to the buying process, however, the platform does not address the strategic planning side of the equation. Agencies offer advertisers an independent and impartial partnership to evaluate tools and offer insight into creative performance, ROI measures and more. With large investments made into planning tools, Empower is committed to understanding strategic targets and building communication plans that effectively reach them. Nevertheless, coupling Empower’s planning abilities with Google’s perceived buying efficiencies may yield powerful results in the not too distant future. Stay tuned.