NEW YORK When Google and Publicis Groupe announced a partnership agreement in January, its scope was far from clear, beyond the fact that the two companies would take part in some meetings together. At the Interactive Advertising Bureau’s MIXX Conference here today, two top executives from the companies offered some long-awaited details.
The agreement is designed to develop ways to simplify the buying and selling of online advertising, explained David Kenny, managing partner of Publicis digital unit VivaKi, and the driving force behind the deal.
The current business model for Publicis is challenging. It takes 44,000 employees to generate $5 billion in revenue. By Kenny’s reckoning, agency staffers spend 40 percent of their time on mundane tasks like sending insertion orders via fax.
“It’s a massive amount of work for that outcome,” he said. “A lot of that work isn’t that interesting.”
Publicis is betting that Google’s wide-ranging platforms can provide agencies a better way of making money by taking headaches out of the process. One tangible result from the closer collaboration: a 71-page legal agreement Google required shops to sign shrank to 1.5 pages.
While such changes might seem small, they add up, said Tim Armstrong, president of North American advertising and commerce for Google. Such improvements mean agencies can spend more time developing on strategy and higher-value services for clients. Google itself has felt the pain of overlapping systems, which it is attempting to untangle through what it calls “Project Spaghetti.”
“The challenges we were having internally are the same everyone was having externally,” he said.
The two executives reiterated their commitment to exchanging employees, although they did not give numbers or details. In one case, a Digitas executive on the General Motors account spent two weeks at Google studying the search-giant’s business practices. These exchanges help each company think more like the other, Kenny and Armstrong said.
Another tangible product of the partnership is a test Google is running with mobile ads on YouTube videos. Of the eight participating advertisers, five are Publicis clients. Armstrong said it was unlikely that number would be so high without the agreement.
While Kenny hopes to make the ad process less people-intensive, his goal is not for agencies to employ fewer people. Rather, he said, agency personnel should turn their attention to changing campaigns on the fly and thinking up new solutions for client problems. That could mean a new breed of agency employees who are more comfortable with a numbers-driven approach to creativity and an understanding of Wall Street-style risk-management techniques, he said.
“The market has shifted to digital faster than the talent has shifted,” he said.
Armstrong said Google would measure the success of the agreement in part on how much extra revenue it generates from Publicis agencies, such as with the YouTube trial, and through a NetPromoter-like gauge of how responsive Google is judged by agencies. Kenny said success for Publicis would be based on the progress it makes toward meeting his overall goal of greater efficiency.
“We’re looking at this partnership as part of the reinvention of our company,” he said.