Google answers

Revolution UK 04-Apr-07

Philip Buxton puts your questions to Dennis Woodside, UK MD of Google and perhaps the most powerful man in UK digital marketing.

Google has two faces. Among consumers it is an internet deity. By far
the most popular search engine in the world, it accounts for almost 90
per cent of searches on the web in the UK, and continues to develop

startling new services such as Google Earth, which offers a searchable

3D view of the planet, and Gmail, the first email service to give
unlimited hosting space for users.

But, to the media world in which it increasingly makes its presence
felt, the company's image is less favourable. It is worth about £100 billion, yet, despite making almost all of its revenue from
advertising, it is often described as remote and unhelpful to
advertisers and their agencies.

Given its reputation, when Revolution had the chance to meet the
company's UK MD, Dennis Woodside - his first major interview since
taking the role last September - we decided to let the industry put the
questions.

So, as he settles down in one of the author-named meeting rooms (we're
in Wilde) in Google's famous Googleplex near London's Victoria station,
Woodside - who came to Google in 2003 by way of McKinsey - is open and
friendly. He is hard to pin down; jet-setting regularly to keep track of
things in the US. But, though time is short, he is keen to hear what
Revolution readers want to know. So, you asked the questions and here is
what potentially the most important man in UK digital marketing had to
say.

Do you think MSN will be taking market share from Google or that people
will start using more than one search engine?

Ariel Schvarzstein, marketing manager, Expedia.co.uk, Expedia.nl and
Hotels.com

Dennis Woodside: People tend to go to whatever search engine they think
is going to deliver the fastest and most relevant results. With Google,
we have been successful because we do just that. We deliver results,
which are very relevant and very fast in a way that is trustworthy.

So what we are going to find is more and more types of information that
are available in our general index and where you can search over
information that is in any digital format whether that is books, whether
it is video, or whether it is HTML. My belief is that you are not going
to see a huge fragmentation of search as long as we keep innovating in
the space.

Revolution: The real question is, how do you think MSN and Yahoo are
doing? Do you see either company doing any better in the future?

DW: That's more of a question for them. I really cannot comment on how
their business is doing - I can only tell you how Google is doing.

Given the difficulties with seeing the implementation and knowing who
the partners are, what is the best way to get the most out of Google's
content network? (The system for AdWords clients that allows them to
place ads, including video banners, alongside relevant content on web
sites.)

John Martin, internet business manager, Goldshield Consumer Health UK &
Ireland

DW: The content network is much under-used. If you look at pricing, it
is fair value, so one way that we see the advertisers using the content
network is to broaden the aggregate volume of clips they are getting and
to start lowering overall pricing.

How is Google planning to offer cost-per-acquisition (CPA) advertising,
and how important does it see this becoming to its revenue stream in the
coming months or years?

Paul Coggins, executive sales director, Zanox

DW: CPA-based models are something that is going to be an increasing
focus for us. It will make sense for certain types of advertisers where
they have the right kind of Information.

But the real issue with CPA is it requires an advertiser to be
relatively transparent with what their cost per acquisition is - some
are willing to do that and some are not. For some it will make a lot of
sense and will be quite effective. I would expect to see something in
the near future.

Isn't the problem with Google apps documents and spreadsheets the fact
that, should the internet connection go down, you cannot work? And what
is the biggest concern for the future of Google UK?

Ed Anderson, online communications technical manager, Microsoft.

The power of Google apps (online software services such as word
processing) is shown by the example of a reporter in Hong Kong who was
trying to file a story to the UK. His PC's hard drive crashed. But
luckily, he was using Google apps so he could finish his story and file
it.

As for what we worry about most, I think it's the two guys in the garage
who think up the next big idea. That could be anything. Just look at
last year. YouTube officially launched in December 2005, and, by
December 2006, it had more than 100 million users (Google bought YouTube
in October for about £1bn). It literally was two guys in a
garage.

It always seems to be two guys. Look at Larry and Sergey (Google's
founders Larry Page and Sergey Brin). We worry about whether we're
innovating fast enough, whether we're on the cutting edge in web
development and what our advertisers want to do.

REV: So the thing you fear most is the next Google?

DW: Yes, that would be a good answer.

If Google had to choose between love or hate regarding affiliates, which
would it be and why?

Mark Walters, COO, Affiliate Window

DW: I don't think it is love or hate; that's a strange way of putting
it. With affiliates and where affiliate networks are providing relevant
experiences for consumers, we think that's fine, and there's plenty of
affiliate marketers who are aggregating information in an interesting
way and putting together information in ways that provide value to the
consumer.

In the instances where we think people push the line and try to trap
people into clicking into stuff to make money, then we don't view that
very well.

How much revenue or clicks do affiliates account for through Google
UK?

Mark Walters, COO, Affiliate Window

DW: To be honest I don't know, and if I did, I don't think we would
share it.

Does Google expect video revenue in the UK to eventually outstrip search
revenue?

Phil Cooper, CEO, Utarget

DW: There are clearly going to be opportunities for marketers here and
we are all trying to figure out what those are. You are going to see a
period, just like you did with search in 2000 and 2001, where people try
different advertising formats, different advertising models -
sponsorships, in-stream video ads, pre-roll ads, interstitials, whatever
- before we get to a model that is working for the advertisers and, more
importantly, that is working for the consumers.

When you have that much consumer usage, you are going to have a
business. The question is when, how much, and who is going to provide
the technology that powers that business.

What are Google's long-term plans with regards to the illegal posting of
video within Google video and Youtube? Is there any opportunity for
Premier League Clubs to work more closely with Google?

Mark Rowan, head of communications, Everton Football Club and Mark
Hargreaves, general manager, Manchester United Interactive

DW: There are absolutely more opportunities for Premier League clubs to
work with us more. We have a deal with Chelsea where we are hosting
content for them through a YouTube channel. The web enables fans of all
sports to engage with their teams in ways they could never engage
before. In terms of copyright, it is something we take very seriously.
We are not a content company.

We are a technology company and what our technology does is provide
people with an opportunity to access information in whatever format it
might be. In terms of video, we are providing technology that allows
people to share content. Some people take advantage of that and post
content that they don't own. As soon as we are notified of that we take
it down, and we are working on tools to automate that. But this is a
problem we are going to have to work on, and we are going to have to
solve.

Why does your approval process for registering a trademark take so long,
for example, up to three months?

Rebecca West, phones4u

The question is what is Google doing about trademarks and how do we try
to protect them.

We have a registration process where you can register your trademark, as
you know. We need to clear that registration to make sure it is
legitimate because we don't want people registering trademarks that
aren't legitimately theirs.

That, of course, takes time and we wish it would not take as long as it
does. But the fact is you need to do real work, you need to do legal
clearance to get that done and it inevitably takes time.

REV: From what we hear, a brand has to send their application to
California, you can't send it to the regional office.

DW: You can work with your team here, if you have a team in London, they
will help you do that.

Why does Google change ranking methods periodically for
optimisation?

Shane Ryan, Axciom

DW: That's a good question. Our strength is matching relevant
advertising with queries and we are always looking for ways to improve
the relevance of the advertisers that we serve.It is a fairly detailed
science as to how to do that, so we have PhDs and scientists in
California and Zurich whose job it is to improve the ranking
algorithm.

When we find breakthroughs that are going to benefit advertisers and
users, we change it. It's not just important to put the most relevant
ads on the page, it's also important you don't put the least relevant
ads on the page if you have ads that aren't that relevant. It all winds
up detracting from the ads.

Is Google going to use personalised search features to provide
better-paid advertising, and thus allow advertisers to optimise activity
against behavioural use of profiles?

Andrew Burgess, MD, Equi-Media

DW: Good question, I honestly don't know the answer. It is probably
something we are looking into but, really, I don't know the answer to
that.

How is Google trying to monetise properties such as YouTube given that,
in the near future, ad blockers are going to be more prevalent?

Raf Rasile, head of production, Good Technology

DW: People click on ads for a reason, they want to find out what the
advertisers are selling and make a decision about purchasing. The
supposition of ad blockers is that advertising is bad. As long as
viewers find advertising good we're not too concerned.

In what year will Google take over the world?

Scott Andrews, senior copywriter, Good Technology

DW: (Looking baffled) People overestimate Google. When I joined, there
were about 1,000 employees, now there are about 10,000. But you can look
at 1,000 companies in the world that have more employees and more
revenue than Google. People get excited because we have gone from no
revenue in 2000 to $10bn last year. What really is more
interesting is, where is the internet going to go? And how much of our
lives are going to be spent online? People find themselves always in
front of a computer. I have a Mac at home and it is always on, and
hooked up to the internet. We don't know how big that can become and
that's much more interesting than how any player can do, or how big any
specific player will become.

For a full transcript of Dennis's answers, go to
www.brandrepublic.com/revolution.

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