Google – Still One of the Good Guys
If you're in the ad business, chances are you feel strongly about Google one way or the other. It seems that the behemoth is trying to take over almost every form of advertising as we know it – some mediums more successfully than others. It all started with paid search and now Google absolutely dominates that space, owning 58.5% of the search share in October 2007, according to ComScore. Moving beyond search, Google spent a whopping $1.65 billion to acquire YouTube last year, then followed that move with a push into the online display advertising market. Meanwhile, Google has also made several forays into traditional media channels with newer ad and measurement models. It has broken into newspaper and radio sales with mixed results, and more recently, it entered into the highly competitive world of television ad sales.
Despite some less than stellar ventures, Google continues to innovate and push the envelope, as seen most recently with its aggressive move into the mobile space. This summer, Google created the Open Handset Alliance, and already more than thirty wireless companies have joined, ranging from handset manufacturers and application developers to network operators.
If Google is able to launch a mobile service, its newly acquired mobile platform, Android, will host all of the services and be the vehicle through which a whole new channel of advertising and services will develop. While the biggest domestic wireless networks, AT&T and Verizon, have held out of the alliance (although Verizon may be changing its tune – read more by Erick Schonfeld), it seems as though every other player in the wireless space is excited about the endless possibilities that an open architecture could provide.
So, despite an incredible $215 billion market cap, Google clearly is not content being just a "search" company. As advertisers, we have to ask if it is good for one player to harness so much power and to control so much of the advertising inventory in the marketplace. So far, my answer would be that I have no problem with it, and here's why.
The beauty of Google's products is that they are all geared towards delivering highly relevant content to users. It all started with paid search, where advertiser can bid on keywords relevant to their businesses. Continuously updated algorithms, however, ensure that the highest bid prices do not alone ensure the best placements. If you pay more than your competitors to be ranked in the top three positions, but your website is entirely irrelevant, your ranking will quickly drop. You're probably thinking, "Yeah, but all search engines use algorithms that incorporate relevance into their rankings." Yes, but what separates Google as a company now is that it has transferred the simple idea of relevance to all of its new product offerings, enabling advertisers to deliver messages that are not just highly relevant – or at least more relevant than those that previously existed – but also highly measurable. In fact, one of Google's biggest differentiators is that it provides a much more detailed level of reporting than its competitors across almost all of its ad products. Knowing that I can deliver a highly relevant, highly measurable message to my client's audience across a variety of channels makes Google a highly valuable option in my advertising vendor arsenal. Also, the more Google blurs the lines between channels, the more hope I have that we will all be able to better measure and evaluate multi-channel marketing campaigns in the near future.
So, just because Google constantly innovates and tirelessly seeks new angles to dominate the advertising marketplace does not make it inherently bad. If it started jacking up prices and we had no competitive alternative, I would certainly argue differently. So far, that has not happened and the positives far outweigh any negatives.
P.S. Rumor has it Google is working on a set-top box for TVs that will have an open architecture, similar to Android. I'm sure this will be a hot topic in the next year or so.
