Here we are in the spanking new offices of Google Canada. There's the flat-screen image of a rotating globe up on the wall of the reception area, appropriate for a company seeking near global domination. There's the predictable crayon box of Google colours scattered about, in both accessories and the Google logo itself. And there is a sign-in process for visitors that involves a touch-screen nondisclosure agreement certifying, in part, that I am not a citizen of Cuba, Iran, North Korea, Sudan or Syria.
Having cleared security, I sat down for a chat with Tim Armstrong, senior vice-president of Google Inc. and overseer of the company's North American and Latin American advertising.
I was looking at a video of you the other day and you said you were at Google before Larry [Page]and Sergey [Brin]were Larry and Sergey. What was the year and what was your role?
In September of 2000 I got to Google and I was vice-president of national advertising, which was in essence really launching the first office outside of the headquarters in Mountain View [Calif.] and I think making a more aggressive push into advertising. At the time period the majority of Google's revenue came from syndication of technology, and this was kind of one of the first investments into getting more into the advertising business.
What was your thought at the time in terms of the potential for growth in the advertising domain, what it might be able to contribute to Google in the long term?
Out of the gates I thought it would be very impactful. Not as impactful as it's become. I think that would have been very tough to foresee, but one of the experiences I had before coming to Google was working with Infoseek, which was another search company. This was in 1998 and you could see how effective search advertising was. ... When you fast forward to Google you have a much better search technology, much cleaner environment.
What were the guiding principles in seeking to develop advertising on Google?
The first one was that, you know, very valuable space in general was the intersection of information and commerce, so I think from a business standpoint that was a very important space to play in. And the second piece was really looking at advertising like information. So how do you make advertising very, very successful for end users or consumers? And what's evolved out of those two principles ... is really what's driven Google's model and success. I think one of the things we're most proud of as a company today is that for most of our advertising products the end user or the consumer actually helps judge how successful the advertising is and also what the price of the advertising is so you know consumers have a vested interest in the advertiser's success and vice versa.
Talk about the appearance of AdWords. When we think of advertising ... it's such a design-driven medium, it's an eyeball catching medium. What was it that drove the decision to present [the ads]the way you present them?
When we launched the text-based ad product one of the things that was really nice about it was that it allowed consumers to get a lot of information from a very small amount of text. Back then I think a lot of the advertisers and ad agencies looked at it as being a non-creative mechanism to meet consumers, but what's happened is that people have recognized that it takes an extreme amount of creativity to actually take a few characters of text and affect an entire marketplace.
Was there some skepticism about this ... from the advertising community?
We went out to see one of the major U.S. car manufacturers. ... At the end of the meeting they said come back when you can flash the sheet metal, meaning when you can actually show a picture of the car. We basically said we would love to be able to show a picture of a car but we also think we can actually show an image of the car through text, we can actually explain to consumers what you're trying to get across in text versus an image just as effectively or more effectively. ... That customer didn't advertise with us for a couple of years.
If I'm Googling "hybrid SUV," do you know something about me just by my doing that?
I think the beauty of the search model is that the one thing we know is your intent. ... There's a chance that we're going to be able to give you the right information at the right time - the right ad to the right user at the right time with the right outcome because it's a very self-directed form of advertising. Google doesn't need to know who the end user is to be successful in advertising.
Up until a week ago I had never clicked on AdWords. Does that make me a freak?
Ahhhhh, it makes you one of our new best friends. I think in general the fact that you haven't clicked on AdWords is a good sign to us we haven't served you relevant ads enough for you to want to click. ... The fact that you haven't clicked and you're someone who is in the marketing area, who covers marketing and advertising, that says to us maybe we're in the pregame warm-up. Maybe we're not in the first period.
What are you seeing on the ad landscape today?
One of the things I get a lot is, if the economy gets worse will digital suffer from that? The fact of the matter is when the economy gets tough advertisers tend to focus on core activities they can measure. Digital happens to be something that's very core and very measurable. ... In traditional media for the last 100 years a lot of the analytics have been on the upfront part of media - what audience am I buying? Now I think you're seeing a fundamental shift to the back end of advertising analytics, which is how are the audiences connecting with my messages and how do I take how they are connecting with the messages and basically inform the front of the funnel, which is what audience am I going after? I think you now are seeing a concentric circle of people planning and buying media, measuring the media and then using those measurements on the back end to go back to the front end of the circle and redo those. They're really starting to do them in real time. We have customers that manage their individual ad campaigns every day, multiple times a day and improve them every day, multiple times a day.
Your forecast for the Canadian economy?
I wouldn't want to venture there. ... Canada is such a wired country you'd have to imagine that even if there's an economic slowdown ... you'd have to think the Internet is going to get stronger in Canada during an economic down cycle. People will get smarter about what they're looking for. They'll get more conservative on the shopping front but actually do more research and information grabbing around commerce. Canada has been really successful in the last couple of years even when we've struggled a little bit and we're banking on you guys to keep it going.