As Google Turns 20, What Does Its Future Offer Advertisers?

Chief business officer discusses maintaining competitiveness amid technological change and heightened consumer expectations

Since its beginnings as a search engine 20 years ago, Google has evolved to become arguably the most important media outfit in the world. Getty Images
Headshot of Ronan Shields

Google turned 20 years old this month, and the first Google Doodle appeared on this day in 1998. Since its early days as a project at Stanford University—named Backrub—to rank webpages based on their authority, it has morphed several times over to become arguably the most important media—or technology—outfit in the world.

Adweek recently caught up with Google’s chief business officer and svp of global ad sales and operations Philipp Schindler to discuss how he sees the company’s advertising offering evolving, given the pace of technological change.

The rise of ‘assistive computing’

“There seems to be a big shift every decade or so,” he said. “We had the web coming along and then with the mobile transition and now we have cloud computing being fundamentally changed again—although some would call this an evolution—when it comes to machine learning, and this has a lot of consequences for our business and the industry.”

These forecasts are based on usage habits the behemoth is already seeing, with Schindler reporting that approximately 20 percent of Google’s U.S. search queries from Android devices are voice-based.

“It’s important to consider that [the] assistive computing environment … means you have a lot more natural means of engaging with digital devices across multiple different surfaces [note, not necessarily screens] that you interact with on your desktop, phone, TV or car,” he predicted.

In terms of consumer expectations, this means the precision level of search returns has to be higher, especially as usage migrates from the desktop.

“We can also see that the query stream is different in the sense that the amount of actions that a user will point at an assistant [such as ‘buy me a pizza from a nearby restaurant’] is dramatically higher,” added Schindler.

The challenges and opportunities for advertisers

Needless to say, such changes mean consequences for the advertising industry, according to Schindler. For example, he said, the smaller the surface areas of a device, the more relevant the results to a search query have to be.

Schindler also said that one of the biggest changes in recent years has taken place with little or no public attention: the rise of “responsive search ads.”

He added that responsive search ads are “shining a new light on an old problem” with Google now using machine learning to test which campaign creative operates best in a given environment, whereas this was previously a task that had to be performed manually, costing many man hours.

“Machine learning is fundamentally disrupting things we thought were established [practice],” he said.

The positive feedback from advertisers on its machine-learning offering has prompted Google to open up its APIs to advertisers, which means they can in turn benefit from the behemoth’s machine-learning capabilities and infrastructure without having to make the initial financial investment to build such capabilities.

“The next revolution is that we will provide, as part of our cloud offering, something I’d call ‘machine learning as a service’ … we’ve seen an incredible amount of interest which goes beyond what the advertiser wants; it’s what the CEO wants to see as well,” added Schindler.

Given the changing nature of consumer behaviors, and Amazon’s rise in the digital advertising rankings, a recent report from Canalys suggesting that shipments for Google’s personal assistant Home have now outpaced those of rival Amazon Alexa is welcome news for the company.

However, now that a significant number of searches are voice-generated and “small-screen audiences” have heightened expectations, just how will Google create an advertising opportunity around these behaviors?

When probed by Adweek on how Google aims to square this seeming conundrum—i.e., will Google Home users ever have to sit through a six-second voice ad after making a query—Schindler claimed any such monetization opportunities won’t be so linear.

“I think the most important thing to consider is not to confuse an assistive environment and think of it as a voice-in/voice-out environment,” he said. “You see smart displays that have an offering like voice-in and display-out and in so many use cases, that’s actually really good.”

For instance, a voice-based search input for options on where to buy an item of clothing could be answered with a display-based return, an environment that would appear much more disposed to housing ad formats. And with Google reportedly preparing a display-based Google Home unit, the thoughts behind the monetization opportunities are soon apparent.

YouTube is becoming more and more like TV

The growth of YouTube is “mind-blowing,” according to Schindler, who pointed out that its 1.9 billion logged-in users generate a billion hours of watch time per day with 70 percent of this consumption on mobile devices.

But Schindler pointed out that the fastest-growing screen for YouTube watch time is on TV, with 180 million hours of viewing time generated by viewers of such devices each day. “People accept it on a large screen, but it’s a completely different experience as well,” he added.

The biggest consequence again for the advertising industry is that “traditional, forced 30-second ad formats copied from TV” won’t work and users simply “don’t accept it,” according to Schindler. Although, to help accommodate this switch, the digital media giant is conducting research into new ad formats that will resonate with audiences on such devices.

“The feedback for ad formats, such as the six-second unit, is that they work surprisingly well,” he said. “They can easily hold their own against 30-second slots against TV slots in the evening.”

To this end, Google is making efforts to show advertisers how YouTube ads can also be used as direct response opportunities with its TrueView for Action slots, and that the video-sharing service is not just a branding channel to be used as an addendum to their above-the-line executions. Speaking earlier with Adweek, Tara Walpert Levy, YouTube vp agency and brand solutions, said that articulating this opportunity to marketers would be at the core of its messaging this fall.

Whereas previously TV ad campaigns were seen solely as a branding vehicle, and Google’s core competency of search as a performance marketing opportunity, Walpert Levy sees the blurring of traditional and digital media as an opportunity.

“My experience has been that marketers have always wanted to address both brand and performance goals in any campaign,” she added.

“None of us made it easy for brands or agencies to do those things together. And I think when digital came along, that was more obvious application that you could,” she added.

@ronan_shields Ronan Shields is a programmatic reporter at Adweek, focusing on ad-tech.