Is This the Most Important Person in Advertising?

Hint: she runs a $43.7 billion ad business

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In many respects, Susan Wojcicki is Google’s most important patron. Her garage served as the original Google headquarters, and over the last decade the svp of advertising has grown the company’s advertising business into a $43.7 billion revenue stream as of last year. EMarketer projects that Google accounts for better than 41 percent of total digital ad revenue in the U.S. As more advertising dollars transition to digital, Google becomes ever more a proxy for the entire ad business. That shift positions Wojcicki alongside WPP’s Sir Martin Sorrell and CBS’ Les Moonves in the traditionally male-dominated echelon of advertising’s elite. Earlier this month, Adweek sat down with Wojcicki at the company’s Mountain View, Calif., campus to pick her brain on Google’s past, present and future. After all, as goes Google, so goes advertising.

I’d say you’re the most powerful woman at Google. What does that mean to you?

First there’s my role just as an executive being responsible for advertising, regardless of gender. I think that’s a position that I take seriously. That’s the first role. But I think for my role as a woman at Google, you try to set a good example and be a role model for the other women in the organization. And you also try to mentor women in the organization because you have been able to achieve something that a lot of other women want to understand how you [achieved] that to the extent that you can help them and give them advice. I’ve tried both to be a role model as well as a mentor.>

Who were your mentors?

Actually one thing I should mention, just back to me as an executive at Google. I’ve managed [Google’s third-party display ad network] AdSense since the very beginning. It’s turned out to be a bigger and more complicated business than we ever could have imagined on day one. But having managed it since the very beginning, that continuity gives you a lot of ownership over the business. And you also understand the whole history.

It was your idea, right?

That’s controversial. Many people contributed to the idea. There were certainly lots of people who contributed technology. There was a project at Google that they weren’t really sure what the application put-out was going to be, and it turned out that AdSense was that application for it. They were trying to create some kind of [artificial intelligence] systems 10 years ago, but they weren’t really sure how it’d be used. It turned out to be very, very effective for AdSense.

AdSense has grown a lot, but so has Google’s overall advertising footprint. You guys have been extremely active in acquiring companies like DoubleClick, Admeld and AdMob in building out this end-to-end ad tech stack.

The way I see it, we started in this business of serving ads on other people’s Web pages. Then we developed contextual technology but realized it wasn’t quite enough and started to go into brand [advertising] and display ads. Then we realized we needed an ad server, an exchange, a [demand-side platform]—so one thing led to another. Today our goal is to have an end-to-end solution for advertisers and publishers.

Why is that important?

Buying advertising right now is way too hard. In order to get more advertising [dollars to shift to digital], you need to make it be easier. People don’t understand the logistics of advertising. To have the ads purchased and run, you need to have a series of products that work together.

Recently, Google’s chief business officer Nikesh Arora spoke at a conference and said 50 percent of ad spend will switch online in five years. What’s the strategy to fuel that?

Advertising is very simple in a lot of ways. Advertisers go where the users go, and users are choosing to spend a lot more time online. Look at the adoption of tablets. Tablets have beautiful screens and can be interactive, so I think a lot of traditional print is being moved to being read on tablets. And I think we’re moving to much more [Internet]-enabled TV. And think about radio, there are a lot of great services like Spotify, Pandora, iTunes and [Google] Play. So the users are moving really, really fast, and the advertisers need to catch up and move to where the users are.

Would the move to IP-enabled TV bring about the resurrection of Google TV Ads?

I think it’s more that we would be able to scale what we currently do on tablets and desktops to TVs. TVs become another screen.

That fits with Google’s mobile strategy and the recent change to AdWords to view mobile as a context and not necessarily a siloed channel. Why that position?

I think we’re getting to the point where I don’t even know what a mobile device is anymore. If I have a laptop and the laptop has a detachable touchscreen, is that mobile or a desktop? If I have a phone with a really large screen, is that a handheld or a tablet? If people take tablets and attach a keyboard, is that a tablet or desktop? These things have happened only in the last couple of years. If you look at how fast the user behavior is changing, we began to feel that it’s really important to understand for our advertisers the right way to reach users independent of device and look at the context around them to serve the right ad.

That context-based approach makes sense for AdWords since it’s about search, but does it work also for mobile display advertising?

I think it’s similar in the sense that advertisers want to reach users. It actually gets back to my earlier point about how buying advertising today is too hard. At the end of the day, we want to simplify this for advertisers and agencies, so they can just reach the right users. We’re giving them the right tools and metrics regardless of device and for them to give us their assets to figure out the right ads to serve to them. I think display is both direct response and performance, and we want to give them the tools to reach the right users.

How does the rise of automated buying—parallel with this push around native advertising and Google’s context-oriented approach—portend for ad units in terms of tweaking existing formats and creating new ones?

In general, we want to make it as easy as possible for advertisers. There are a lot of things that advertisers can append to their search ads, like site links or location extensions. If we have that, we want to show the right extensions for that user. That’s what we mean in terms of context. To the extent that advertisers can give us the assets that make sense for them and we can figure out dynamically the right way to serve them, that will make it easier and potentially higher performing for advertisers.

On the other hand, there are going to be different formats, like for a mobile phone there is app download and click-to-call. But again, we want to make this as easy as possible for advertisers given that they’re living in a multiscreen world.

In terms of newish ad products, you have TrueView ads for YouTube. Do you expect to make any tweaks as more and more people watch videos online and more advertisers flock to video? And what about new video ad units?

We always are making different changes to TrueView to make it better. What I think is significant about TrueView that I think is going to be significant for advertising going forward is users have a lot more choice today, and TrueView recognizes that and really changes the model. If users are choosing whether or not they want to see the ad, then advertisers are going to build campaigns that are really compelling for that format. I think we have to recognize as an industry that users have a lot more choices and can click away to a lot more media. As a result, the advertising we create really needs to be something users want to see.

That was sort of the rationale behind shifting Google Shopping to a pay-to-play model last year with Product Listing Ads. There was a lot of pushback, but a couple studies have shown PLAs performed well for e-commerce advertisers. Are you looking to do more vertical-oriented ad products?

Retail is a pretty big area. The other area that I think we’ve been early is some of our work with travel. We acquired [flight search firm] ITA [Software]. We’ve been introducing Flight Search. We have Hotel Finder. We’re still pretty early in that space, but I think that would be another place where we’re thinking about what’s the right format in context.

Retail and travel are big verticals and full of direct-response advertisers, but the shift of TV dollars online is keyed around brand advertisers who care more about impressions than clicks. Does that require more effort and attention toward impression-type campaigns?

We’ve been spending more time here on brand. I think we’re still pretty early, but some of the things we’ve done that will be important going forward will be the engagement ad format [Lightbox] that we released [last October]. It gives a canvas to advertisers to have a lot of flexibility with their creatives, but it also is similar in the sense that the user needs to engage with it in some way to be counted. The second thing we’ve been focused a lot on has been measurement. Yes, impressions are important, but how can we get advertisers more tools to understand if that impression worked and what was the effect. We’ve started with some things. We have Active GRP, and we have Active View. This is a huge area we’re going to see a lot of change in over the next couple years.

Google is one of the biggest advertising companies in the world, but you have this product Google+ that is devoid of ads. Why is that, and is a paid media product on the table for Google+?

Generally, our approach with products at Google is to first develop the right user base and then to figure out what’s the right experience for the ads. I think we’ve been consistent with Google+.

What are you seeing so far with that approach?

The first step is for brands to have a page. Overall we’ve seen good adoption but are continuing to roll out new features.

Back to the ad tech stack, you guys have a pretty high batting average when it comes to ad tech acquisitions. This year is expected to be an active market but with a smaller share of buyers, Google likely among them. How are you looking at the market?

We acquire companies when we need them. Our first preference is to build, but you can’t always build because of time to market or you don’t have the right expertise. There can be many reasons. We’ve acquired when we’ve seen really great talent and have been able to get to market faster. Every acquisition is different depending on what the plan is, but you have to have really thought through what the right integration is for that company. For a long time we said YouTube was running separately, whereas DoubleClick we decided to integrate. When you integrate, it’s really important to mix it up a little bit.

You acquired social marketing software firm Wildfire last year. As far as I’ve heard they’re remaining independent, but they’re also part of the DoubleClick Digital Manager ad tech stack. Is that a template of how future ad tech deals would work?

Every deal is going to be a little bit different. It really is done on a case-by-case basis. Some companies need full integration, and some companies need to run apart. I wish there was one template—that would make my life a lot easier.

How’s the Wildfire acquisition been going?

It’s been good so far. We’re still really early where the team is continuing to execute. We have some good long-term plans.

On the other side of social, you have arguably the biggest DSP out there in Invite Media, but you don’t have access to Facebook Exchange. When can we expect to see that happen?

That’s a hard question. That might be a question to ask Facebook.

You’re keynoting on the future of digital advertising at IAB’s leadership meeting. What do you see for that future?

I’m still working on my talk. But at a high level, we need to be prepared for what Nikesh said about 50 percent of media dollars moving online in the next five years, and users having a lot more control and options because everything is just a click away. As a result, the ad industry needs to pivot to models where they’re creating the right creatives, reaching the right users and where users are opting in to seeing their ads, and that we have good measurement to understand whether this [ad] is useful or not for the user. Right now I don’t think we have all the tools in place to be able to do that. What I’m excited about, being in the position I’m in, is how do we build those tools to take advertising to the next level, so that advertising becomes something users really love and see as useful.