Backchannelmedia

International Herald Tribune

By Stephanie Clifford

On a July day in Chicago, Google employees swarmed a conference room at the advertising agency Leo Burnett, taking in couches and beanbag chairs to create a lounge. They gave away candy and showed off Google's advertising technology. Throughout the day, they emphasized a single message: Google is a friend to ad agencies. No, really.

Advertisers are grappling with the idea as Google, which spent many of its early years avoiding - and infuriating - advertising agencies, has suddenly started embracing them.

Over the past year, Google has built a 40-person group that is charged with courting agencies, trying to convince them that their clients should buy ads on Google sites and use the search engine's tools. The Google team - like any ad team - is visiting agencies to show off the company's products, like video ads on YouTube and display ads from DoubleClick. They are even holding office hours inside ad agencies, soliciting feedback and fielding questions.

"We understand that maybe we haven't been the best partner over the years," said Erin Clift, the director of agency relations at Google.

Google could avoid ad agencies when it sold only search advertising, where it is dominant. But now that it has a wider set of products - including social media and virtual reality - it finds that it must work harder to drum up business, particularly because of the lingering hard feelings.

Google is "definitely a must-buy in search, but in other things it's not a must-buy," said Jeff Ratner, the managing partner and digital director at MindShare North America. "As they start moving more into ad networks and other mediums, they need the agency to help make it a reality."

The most visible part of the new Google strategy is an event called Campus@, which started in the spring. So far the Campus@ team, which has a core of six employees, has done six events, including one for Leo Burnett.

"We essentially take Google - our people, our products, our food, our tchotchkes - roll into the lobbies, and give people the chance to interact with Google," Clift said. The events are "a fantastic way to ingratiate ourselves," she said.

There is still a good deal of skepticism. As Google begins trying to sell television, radio and print advertising, and creates tools for buying and planning media campaigns, some analysts say the company is working with the agencies to eventually displace them.

Peter Fader, a professor of marketing at the Wharton School, part of the University of Pennsylvania, sees the Google approach as part of a master plan to get its corporate hooks into more of the agencies' business.

"If Google were to just set up a shingle and say 'Google ad agency,' the traditional agencies will find a way to keep them out of clients' offices," Fader said.

Instead, he said, "they're almost like a virus, going to work their way into specific agencies, and replace the DNA of those agencies with a more analytic orientation while trying to maintain some of the client relationships."

But Penry Price, Google's vice president for North America advertising sales, said Google had no desire to replace agencies or usurp their clients. "I don't see how we would be able to actually provide a better customer experience to an individual client than an agency can today," he said. "There's no way we could actually line up behind one customer and offer the services and information that an agency can today."

Agencies are not so sure, and they are having mixed reactions to Google's overtures. Some welcome the company enthusiastically. Others say they are unimpressed with Google's products outside of search, and nervous about the company's intent.

"I think they're great at pushing and pulling together what suits their agenda," said Peter Gardiner, the chief media officer of the ad agency Deutsch. "I would not necessarily put them on the same level as other media companies in terms of their partnering attitude."

A lot of the mistrust stems from Google's having amassed a sales force of several hundred people who court large advertisers. While many of Google's sales to small advertisers are automated, the bigger clients get personal attention from sales reps.

This prompts accusations from ad agencies that Google is courting their clients behind their backs. Agency executives are traditionally the ones who make the decisions about where their clients should spend their marketing dollars, and while most media companies and technology providers must go through an agency in order to get on the client's radar, Google - with its cool-kid aura - had an easy time getting meetings directly with clients.

Despite working directly with advertisers, Google also knows that it needs the buy-in of those advertisers' agencies. "We saw that if we had higher hopes and aspirations of getting larger budgets and being a part of these larger marketers' decisions, a lot of decision- making was done at the agencies," said Price, the Google ad sales executive.

But the balance of power is not entirely clear. Google and the agencies behave a bit like "frenemies": as much as the agencies might like to ignore Google, they cannot. Indeed, the WPP chief executive, Martin Sorrell, called Google a frenemy, which he later amended to a "froe."

The company has revolutionized search advertising, providing a level of accountability that was not there before, and has become hugely powerful because of that.

The perks of Google's power are on display at Campus@ events. When it visits agencies, it typically brings in a gelato cart or coffee bar, and has even built a replica of the famous Google office kitchens. It offers free food and a prize of an iPod touch for attendees.

At Leo Burnett's headquarters, there were 18 or so Google employees, almost all of them young, bright-eyed and peppy. They wore royal blue Campus@ T-shirts, some of the women with loose cotton skirts and flip-flops, and the men with khakis or jeans.

They were trying to make Google seem accessible. As Lisa Green, a senior agency-relations manager who was explaining a Google analytical product, put it to Leo Burnett staff members, "It's very natural, as a human, to hear something and want more information, and Google just makes that easier."

The Leo Burnett executives sounded appreciative. "You've got some of the best and brightest people in the industry here, don't hold anything back, milk 'em," John Condon, chief creative officer of Leo Burnett America, said at the event.

The dialogue is indeed two-way. In July, for instance, Google introduced a tool called Ad Planner that shows media buyers sites where their likely audiences might visit, based on criteria like demographics. Google previewed Ad Planner with some agency executives and is now seeking more feedback.

Ad Planner is one element of a bigger product called a media dashboard that Google is preparing to introduce. It would allow media planners to have a screen that will tell them where all the ads for a certain campaign are running, how they are doing, and how much they cost. Some agency executives are excited about what Google has to offer them. "You can see them as a threat, and we don't at all," said Ashley Vinson, an executive at the agency DDB, which recently hosted a Campus@ event. "It's a complete opportunity."

Rob Norman, the chief executive of GroupM Interaction, a large media-buying firm, said he had some issues with Google but did not feel threatened by it. "I think there still may be at least one human media planner left, other than the one that pulls the handle on the Google machine," he said.

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Eric Pfanner is on vacation.

Originally published by The New York Times Media Group.

(c) 2008 International Herald Tribune. Provided by ProQuest LLC. All rights Reserved.