Tonight On Google...And the Tail Wagged. Google and the Destruction of the Media Agency.
by Bharadwaj Ramesh
In the media world, no company offers a greater threat to the established order than Google – a business that has shot from a standing start to become one of the world’s biggest brands in just a few years.
In this presentation, Bharadwaj Ramesh analyses Google’s ambitions and its impact to date, especially in the area of TV. The acquisition of YouTube, says Ramesh, heralded Google’s first step towards becoming “a turbo-charged Electronic Program Guide (EPG), with an optimized video pool.” Google’s internet advertising – which pioneered pay-per-click – has already eliminated the need for middle-men between advertisers and itself, and Ramesh argues that it will do the same with TV advertising.
Its key advantage, he says, is the ability to tag and search text and images to video, so that it can serve up video that is relevant to the content of a website, and the user’s interest. Convergence is taking place with consumers now able to access interactive TV from their cable operator or telco. In this context, the EPG is set to become a lot more important, and Google could provide the search engine that delivers the video feeds that viewers want – from readily available channel programming to internet videos.”
Ramesh argues that it is only a matter of time before Google chooses partners among the telcos and cable operators, as the next step towards becoming the EPG of choice. In other words, it’s only a matter of time before Google appears on your TV screen controlling access to a vast range of programming, and serving ads that have been sold like internet advertising through a bidding system. At that point, the media agency will be completely bypassed. The outlook, for media agencies, then, looks bleak.
Fortunately, Ramesh does have some solutions on offer. Media agencies, he says, must move upstream. They must focus on the Return on Investment approach, build their direct marketing expertise and put TV people in charge of the whole digital strategy – since TV is set to be the future of digital. If nothing else this should sound a wake-up call to all in the media business.
This abstract originally appeared in volume 13 of WPP's Atticus Journal, 2007