Suggested 2010 Resolution for Ad Agencies: Understand The Google

How many folks in ad agencies understand Google? The business, culture, strategy and the full sweep of their initiatives?

Because Google is the company that’s most aggressively laying the foundation for the biggest changes in the ad world. Changes that will affect the ad agency world now and for the next decade.

So I think we can agree that it’s best for folks in the agency world to understand them.

To that end, here’s a pointer to a great post by Chris Dixon called What’s Strategic for Google?

Google makes 99% of their revenue selling text ads for things like airplane tickets, dvd players, and malpractice lawyers. A project is strategic for Google if it affects what sits between the person clicking on an ad and the company paying for the ad. Here is my rough breakdown of the “layers in the stack” between humans and the money:

Human – device – OS – browser – bandwidth – websites – ads – ad tech – relationship to advertiser – $$$

At each layer, Google either wants to dominate it or commoditize it.

Is your business one that Google wants to dominate or commoditize?

For ad creative, I think we can see that Google wants to commoditize it.

Google has shown through actions that it intends to deskill the creation of ad creative and mechanize its management, through initiatives like Google Display Ad Builder and acquisitions like Omnisio for deskilling and Teracent for mechanizing.

(Actually, the whole list of acquisitions by Google reads like a great compendium of case studies to analyze Chris Dixon’s arguments.)

Applying machine learning to text ads and display ads today, to web videos and TV ads tomorrow, Google is the biggest influencer on advertising today.

Thanks to The Register for the image.

Tags:
2010, ad agencies, Chris Dixon, creative, creative tools, google, Google Display Ad Builder, media, New Year's Resolutions, Omnisio, resolutions, Teracent

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[...] A little over a week ago I wrote a post called Suggested 2010 Resolution for Ad Agencies: Understand the Google. [...]

[...] A little over a week ago I wrote a post called Suggested 2010 Resolution for Ad Agencies: Understand the Google. [...]

Amen! I don’t think it’s just Google, but internet commerce in general that has a tendency to break down any industry into component parts that can be easily commoditized. I think the traditional ad agency is on its last legs (or soon will be). There are too many agency functions that, thanks to the internet, can now be bought and sold in relatively simple marketplaces, without necessitating armies of account managers, creative directors, and project managers, rounds and rounds of review, hours and hours of meetings, and last but not least, sack after sack of cash (working with agencies often reminds me of the movie “The Money Pit”…everything starts out pretty straightforward, but at the end of the day, the client is left with a 50-page invoice, feeling perhaps a bit foolish and wondering how they’ll ever generate enough campaign ROI to justify the expense of time and money). The trend of commoditization is tranforming all sorts of industries and professions that once laid claim to rare and mysterious skills. For example, the traditional recording studio has mostly been commoditized away by affordable off-the-shelf software and hardware that, in the right hands, can produce songs and albums that once required million-dollar investments from major record labels. Sorry for the long post, but I definitely think that AdHack is on to something. I’m co-founder of a company called Canned Banners (www.cannedbanners.com) that operates on a nearly identical (but narrower) concept: that clients will save time and increase ROI by creating their own Flash banner ads from high-quality templates instead of going through a lot of expensive back-and-forth with an agency or freelancer.