There’s an interesting rumor doing the rounds about Google doing a re-org of their
advertising business.
Jeff Molander wrote:
“Three of my most credible resources, including DM News’s Giselle
Abramovich, are indicating plans for a significant re-organization at Google (Nasdaq:
GOOG). […] On the re-org, says Ms. Abramovich,
“What this means is that there would be one global account director per account,
that pulls in resources to sell as needed – PPC (pay-per-click), Print, Radio, Video,
Display, etc.”
As of yet nobody can confirm with anyone at Google but the leaks are emanating from
Google itself according to all three of my sources.”
The significance of this is that it’s similar to what Microsoft and IBM already do –
extract maximum revenue for each customer (in this case, the larger advertisers on
Google). This means Google will utilize different types of ads (CPC, CPM, CPA, etc) over
all media channels – search, mobile, video, audio, etc.
The benefit for Google’s customers is that it enables them to target certain leads
across different types of media. They can do that from one ‘console’ and they will work
with 1 Google salesperson/account manager on their account. Of course will the large
advertising agencies be happy with this scenario of Google providing a one-stop shop? Of
course not…
I asked Jeff Molander for his views and he told me:
“When a media company (which is what Google is at this point, albeit a
tech-enabled one) has an increasing number of products — in this case
across multiple media like radio, Web video and text ads — you need to
bring them together for clients.
After all, this is the same approach that large, multi-service agencies are
forced to adopt. Media convergence has been the promised holy grail
(witness AOL/Time Warner) but has seemingly fallen flat when it comes to
actually reducing overall media costs for advertisers. Can Google change
all of that?”
Acquisitions on the cards to increase their inventory
One interesting sub-plot here is that Google needs more “inventory” to sell the
different flavors of advertising. Jeff mentions adsense for podcasting in his post – and
that is certain to be one way Google will increase their inventory. Also this puts the
likes of Feedburner, Meebo, edgeio and Commission Junction squarely in Google’s sights as
potential acquisitions. All of those ‘web 2.0’ startups have no shortage of
inventory!
In terms of Google’s overall goals, as summarised at Google Blogoscoped,
this rumored re-org falls under the “push their ad system” category. It really makes
sense for Google and shows not only that they are innovating in technology – but maturing
and expanding as a media/advertising entity.
See also my trail about this, which I will grow as more info comes to hand.
