Google Rethinks Its Aversion to Ads
Since its earliest days, Google Inc. has largely promoted its search engine and search-advertising products through word of mouth and partnerships. — But in recent months some of the Internet company's executives have been pushing for the company to overcome its aversion to paid advertising.
Context & Ripple Effects
Google has spent years positioning itself close to Madison Avenue, from its engagement with advertising executives in 2005 to the idea of Google as an operating system for advertising in 2006. Its 2008 test of video ads in search results showed the company was still widening the formats it could sell.
The internal push to buy advertising for Google’s own products matters because it applies the company’s advertising machinery to customer acquisition, rather than relying chiefly on word of mouth and partnerships.
First-order effects
- Google’s product and marketing teams would have to treat paid media as an acquisition channel, subjecting campaign spending to the same performance expectations it promotes to advertisers.
Second-order effects
- Advertising agencies and media sellers gain a potential high-profile buyer, while Google’s own use of paid campaigns creates a visible test case for the products and measurement systems it sells.
Third-order effects
- If Google adopts paid promotion broadly, the boundary between advertising platform and major advertiser narrows: growth of the platform’s products becomes more dependent on the media market it intermediates.
The trend: Google is moving from an advertising-technology supplier toward using paid media itself as a tool for product growth.