A New Advertising Engine
Saturday, October 28, 2006
NEW YORK -- At Google Inc.'s new office near the Hudson River, Volvo's top U.S. advertising manager has just flown in from California to talk about next year's launch of a new car, aimed at the hip, 20-something crowd.
Linda Gangeri, a Volvo executive, wants to hear Google's ideas about online video. She high-fives the company for its recent decision to purchase online video phenomenon YouTube Inc. and asks for Google's thoughts about how to advertise the new car, which Volvo is considering launching with commercials only on the Internet.
"This is a target we've never reached before and one you cannot reach via traditional marketing messages -- they reject it," she tells them. "We look to you and challenge you, with Google being more of that young, targeted mind-set."
Just a few years ago, Google was a bit player on Madison Avenue. It specialized in tiny text ads shown alongside search results and in the margins of thousands of Web sites that partner with Google.
But recently Google has moved beyond search, reaching out to big advertisers to sell them online graphical or display ads on its partner sites. The firm is developing new Web video ad formats that could give TV commercials a run for their money and has been staffing up new projects to sell ads offline in newspapers and magazines and on radio.
Earlier this month, Google's ambitions were on display when it opened its new office in the old Port Authority building, covering 1 1/2 floors on an entire Manhattan block in the funky Chelsea neighborhood. The company has recruited executives from some of the biggest media firms and is rapidly expanding its 500-member team here in an attempt to cultivate relationships with Madison Avenue and large advertisers.
"There's probably a false assumption in the marketplace that Google is a bunch of machines in Mountain View [Calif.] and we don't have relationships like you might see at Conde Nast up the street or at ABC television," said Patrick Keane, Google's director of product marketing.
Google's strategy is to bring the math and science that fueled its search-engine ad success to other forms of marketing. The company's existing text-ad system allows advertisers to see how many people click on each ad and pay only when someone clicks, helping advertisers calculate the return on their marketing dollars. Eventually Google hopes to offer similar metrics for online video ads and off-line campaigns, though it is still in the early stages of figuring out how those might work.
"They're trying to take the DNA of search marketing" to apply it to other kinds of advertising, said Timothy Hanlon, senior vice president at Denuo, a new-media consulting division of Publicis Groupe. Hanlon added that the bigger pot of money in traditional "brand-marketing budgets" is a natural target for Google.
In wooing Madison Avenue, Google faces some challenges. Its foray into display and video ads brings it face to face with rival Yahoo Inc., which established its office here in 1997 and is regarded as the leader in helping large companies develop branding campaigns on the Web. Last year, Google reorganized its entire sales force into 12 industry-specific teams after realizing that big advertisers didn't want a sales team of "generalists"; they wanted experts familiar with their field.
Ad agencies seem open to working with Google, though some said the search firm has tried to go around them and pitch advertisers directly. And while Google's ad products beyond search are experimental, they seem worth trying, some said.
"The scariest thing about Google is they don't know what they don't know," said Jason Clement, associate director of search engine marketing at Carat Fusion, an advertising agency. "There's a difference between a Harvard mathematician and someone who's been selling ads for 20 years. The mathematician is smarter, but if you want Coca-Cola's dollars, the guy selling billboards for 20 years is the one you want."