Keynote with Google’s Tim Armstrong

Oct 7, 2008 - 9:43 am 0 by
Filed Under SMX East 2008

Tim Armstrong, President, Advertising and Commerce, North America, & Vice President - Google, Inc.

Before I start, I have to say that this was probably the worst-understood keynote of all time. The speakers in this room did not work too well. :(

Keynote with Google’s Tim Armstrong at SMX East

Danny: Since 2000, Google is well known. Is it too big or too powerful? What's your response about google being a monopoly. Tim: On our side, the answer is no. When I started there, Google had no market share and in the past 8 or so years, it has more market share and we're happy that the business has grown in general. We're providing great results for our users. We're getting people the information they want. On the monetary side, we've done a great job of cramping monopoly behavior by making things very transparent. We have quality scores and bidding pricing - in essence, one of the things I think you see is a less innovative Google/Internet. We want to be an important player but it's not a Google ecosystem.

Danny: With Yahoo and the ads, what's the status now? Tim: The Justice department has asked for more time and all parties agreed. We signed the deal and gave a 3.5 month period for the DOJ. We went into the deal being very open platform.

Danny: If they don't like it, do you go ahead with it anyway? Tim: We're not going to comment about it but at this point we're going to let everyone review it. A lot of things have happened around the deal - some people aren't supportive but one of the things that have been interesting is that larger advertisers is that Google has allowed all players to play evenly. One of the fascinating things from this is that a lot of big companies think they have power over smaller companies but it doesn't matter who is who in Google's system. We're happy to have it reviewed and we're going to let everyone talk about it and we'll see what happens in the next few weeks.

Danny - He asks about the A&A because they don't like the Google-Yahoo deal. Tim: Most of their advertisers are customers of ours. We're talking to these companies. Most of these companies have great relationships with Google and Yahoo and get great returns. We'd love to have them understand the deal better.

Danny: (He asks about quality score, I think. The sound system in this room sucks and I'm sitting about 10 feet away from Tim and Danny.) Tim: Going back historically, given that we've come up with quality score and bidding prices, in general - that core ethos - the respect to end users is important. We still have meetings about how things impact users positively or negatively. The core thing is about the quality of landing page and the experience and time it takes to access these pages - that all came from user feedback.

Danny and Tim say something about making free tools available. I'm not sure what this relates to. Sorry. I still can't hear anything.

Danny: Why can't we have the old style Overture/GoTo feature set and get transparency there? Tim: We're discussing this. I think as we try to define what the quality is for advertisers, we're going to be more transparent about what these things are. One of these important things is listening to customers. You can expect us to become even more transparent over time.

Danny: I want to understand Google and the ad agencies as things have evolved. Tim: I don't think we can compete with ad agencies. A growing number of our clients use ad agencies. A lot of people don't understand and call us names - in reality, the SEMs grew a tremendous business - you look at acqusitions from holding companies and see this. The notion that Google is an enemy is outdated. I think that the people who deal with us think that we're the best partner they have. We really help businesses grow. The statistics show this.

Danny: There's the notion that Google is going to deal directly with clients. Tim: I don't think that Google owns the clients. I think that agencies are the best people to connect. Going back to the monopoly question, in this sense, there is no monopoly. The only company or people who can connect the dots together are the agencies. If we're the direct line into the client, sometimes it's not helpful at all.

Tim talks about how Google becomes digital and Google is touching in search and display and other media. We're going to invest in all this engineering and we want to optimize on this and that's what we did. We started with some principles - people needed to understand what other people were doing (we did employee swaps). Most people come back with a totally different perspective. On the system front, Google has a tremendous amount of information. They have 40-50 million dollars and they want to benefit from it - what platform works and how do they set it up? Also, they need to measure the ROI - driving those things.

Danny: Who doesn't still get search? The search marketers thought they'd be gobbled up but there are people who are going their own way. Surely, everbody gets it now, right? Tim: Good news - there are many people who still don't understand search. He talks about CPG and some other stuff.

Danny: There are lot of opportunity out there, but think about mobile. They say there's moble opportunity and then time goes by. Tim: Think about Local. If you flash back 5 years and you do searches for this, there was very little information. Fast forward to today and the offline information was very pertinent 3 or 4 years ago. Mobile is growing and video has a lot of potential. We see that search on video is a very important topic. It has the potential to be adwords-like in its long term value to the consumers from an advertising perspective. Video is a few differtent markets - some have banner ads but the version 2.0 has overlays. Version 3.0 is [something different, but he said it so quickly that I didn't get it. I told you the sound system sucks.].

Danny: You tested video ads in the search results through AdWords. Is that still running? Tim: Yes. Are there cases where video will be more helpful or more impactful? We're trying to figure that out. Danny: And you had a banner ad! Tim: Images have always been helpful for us. We're trying to figure out if image ads work on images. It took us a long time to decide to test this. We have to measure user interaction here.

Danny: What about offline areas? Newsaper, TV, radio - how is that doing? Tim: The reason why we got into those is becasue our customers asked. Some customers aren't spending all their budget. The newspaper business hits 70-80% of the market, radio is 80-90%, and the TV property on the dish network/NBC touches a lot of households. If you look at success, TV is successful. Danny: What will SEMs do if you have other products? Tim: With video, SEMs have the best opportunities.

There was another question and Tim said Google will grow upon it.


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