Monday at Advertising Week began with a practical and philosophical discussion about standard advertising practices — A Bill of Rights. When it comes to making money in digital advertising today, we’re all cowboys. The field is largely unregulated, and relationships between client, agency and vendor often serve as the only mitigating factors of a deal. To protect the industry’s interests and set a precedent for operating in the space was the focus of today’s discussion, with Google as a prime player.
Google is, as of this moment, an immovable force. Ben Edelman, a Harvard Business School Associate Professor and Google watchdog, compared paying for Google’s Ad space to taxation. With 90% control of the Web search world (estimated), the question for clients is not whether or not to use the service — it’s how much to spend. That’s the cost of getting your brand in front of a client — and this includes paying for keywords, too.
Edelman gave an example of what Google’s market share allows them to do. He said that while in Australia, he looked up Google’s complaint filing process. In order to file a complaint against the company, a certified letter must be sent to Dublin, Ireland. No letter is considered “received” until 14 days after it was sent, and replies to all complaints come via email. For the company that pioneered consumer email as we know it today, does it make sense that their complaint filing system be so antiquated? From Google’s perspective it certainly does, but Edelman argues that another system would prevent market share of this kind from running rampant.
His suggestion: split search share among, let’s say, 5 search companies. Each gets 20%, opening the floor for fair business and ending Google’s reign over us all. As ethically conscious as Google may claim and seem to be, the panelists agreed, their siloed company may not realize every way its terms of service impact the world at large.
AdAge Digital Editor Abby Klaassen moderated, at one point changing the subject to the digital changeover. She asked if ad agencies are losing value with the digital change. Chris Boothe, President and CAO of Starcom answered that data mining has become a huge part of the his company’s digital tool belt, and leveraging that data reduces waste.
Kevin Lee, CEO of Didit picked up that thought and brought the conversation to “narrow casting”, a practice that’s loosely defined (as I understand it) as focusing a marketing push most specifically on people who are likely to buy a certain product. Television ads, for example, rarely fall into this category, unless you’re talking about markets capable of placing ads in specific homes. But to Lee’s point, hyper-focused marketing is changing the proportion of an advertising spend that goes to media. Though 15% once served as the standard, “15% of a budget may not be enough to cover a narrow cast of demographic and psychographic spends.”
“Things are out of balance,” said Group M Global CEO Rob Norman. “due to slim companies trying to optimize technology” as a way to deal with staff reductions. He promoted a return to people powered business — or seemed to — which is certainly easier said than done. It also butts up against the idea that agencies have run into more trouble trying to maintain monthly business. Take People Ideas & Culture as an opposing theory. The agency hires on a need basis, utilizing a core group to create ideas and outsourcing professionals to get the work done.
So if 15% isn’t profitable, how are agencies pulling off search in addition to other traditional and digital practices? Lee theorized that agencies pretend they’ve got search capability by, ie, buying keywords. Others may just lie about doing it at all while still others actually utilize it while cutting back elsewhere.