Chris does Content - the website of Chris Worth, technology copywriter

SNS Special Letter

***SNS*** Special Letter: The Importance of Being Google

For those who remember the great SNS Quiz of a few years ago, or who are avid readers of Ethermail, Chris Worth’s name will be familiar. Chris has his own creative shop in London – [now Chris does Content] – and he’s got an insiders’, jack-of-all trades knowledge of both the ad business and the technology world. Those who have already read or met Chris know that he has the kind of very quick intelligence that you’d want in your own creative director – not just someone to pitch you new campaigns, but someone with an incisive understanding of what makes people tick, why they should buy your stuff, and how this all fits in with larger technical, cultural and demographic trends.

As soon as Chris suggested doing a piece on Google As Ad Agency, I knew it was a great idea. I’d been considering doing a Search Engine piece for awhile, given their current domination of Web usage, but I thought that Chris could bring to this subject a depth of view on the ad side that I’ll never have. This bet has now, I think, been proved more than right, with the detailed piece that follows.

You may think you understand Search, but I suspect you’ll have a much deeper appreciation of where Search is going after reading Chris’ analysis.

By Chris Worth

I’m not the sort that writes SNS Special Letters. I haven’t played Rummy with Mao or poker with Gates; if Alex [Letts] and Scott [Foster] and Sidney [Rittenberg] share the table with movers and shakers, I’m just the guy who clears the plates away afterwards. So this letter’s less about big business thinkers or tectonic shifts in strategy. It’s more about the effects of their decisions on the guys who buy stuff.

Driving a lot of that buying is advertising. And in the last two years there’s been a tectonic shift in advertising: PPC, or pay-per-click. The stamp-sized, text-only ads you see on every results page of Google cost someone a few cents every time you click on one – and make a few cents for someone else.

And thanks to those few cents, a search engine is quietly becoming a major advertising agency.

Let’s think about that for a second. Nobody’s talking about Google in the same breath as Publicis, or OmniBlob, or WPP. But SNS has a tradition of fresh perspectives, and looking at Google as an advertising agency rather than a search engine can give us some interesting insights.

The ad business itself seems to be asleep. The most strategic acquisition opportunity the advertising world ever had has just been lost: Google’s PPC competitor, Overture, was bought in July for $1.6bn. Not by the big ad groups – which regularly spend hundreds of millions buying agencies that then dissolve when people change jobs – but by Yahoo. Keeping the $1.26bn spent on PPC in 2002 in the Valley.

Silicon Valley is the new Madison Avenue, and doesn’t seem to realise it yet.

To back this up, let’s first take a look at these two businesses – advertising and Web search. Then we’ll explore why it’s legitimate to think of Google in the ad agency space, and back up that assertion by sizing up Google’s offerings versus those of a typical ad agency. Finally, a thought on where all this will lead in the next five years – plus a bit of wild speculation.

Mark’s closing comments

I would like to thank Chris for taking the time to help us understand the future of Google, and of Search in general – these ideas apply equally well to Yahoo! (which uses Google search today, but which is developing its own engine), MSN Search, and others.

Reading Chris’s piece suggested to me that Search no longer properly describes the business that Google et. al. are in – even if we, the users, wish that they were. As the business models are refined, the multiple revenue streams tuned, the again-increasing ad rates re-factored into what search will become, I have to agree with Chris’ view: this isn’t Search, and it isn’t even an advanced form of Yellow Pages. Rather, Search has become the culmination of all of the one-to-one, one-to-many, placement, research, and related ad technologies that have been popping up, in products and ideas, in individual fashion over the last decade.

Suddenly, we have them all, from pyramidal marketing to user testing, in one convenient package. We could continue to call it Search, but it’s really the ad agency of the future.

While the Net is an elegant global communications medium, I continue to think that the global digitization of content, and its availability on the Net, is one of the greatest stories of our time. Brewster Kahle saw the analogy with the Library of Alexandria (just recently re-created), but the size of this accumulation of readily available data transcends the word “library” in any normal use. We have digitized the world, past and future, from Biblical sources to shop cams, and put it into everyone’s hands.

In this use of the Net, Search acquires an almost-religious importance: whether you get objective, or biased, or paid-for, responses to your queries about the world, is a non-trivial question. For that reason, even as Google moves to Ad Agency status, new search ventures such as the Open Source “Nutch” are being hatched, to maintain an objective, direct connection to our digitized Web documents.

I’d like to express my thanks again to Chris, who has helped us to see this moment of transition more clearly.