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A neon Google logo is seen as employees work at the new Google office in Toronto, November 13, 2012. (MARK BLINCH/REUTERS)
A neon Google logo is seen as employees work at the new Google office in Toronto, November 13, 2012. (MARK BLINCH/REUTERS)

Persuasion

Why Google is wooing Canada’s ad agencies Add to ...

Google Canada’s Adam Green is exaggerating.

Standing in front of a full room at Toronto advertising agency John St., he boasts about an award-winning promotion for a shoe store in Guatemala, to make the point that great digital campaigns don’t need to cost a lot of money. The budget was “about nine dollars,” he said, getting a laugh.

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It’s just the latest in a string of house calls Mr. Green has made to agencies recently – including Y&R, Leo Burnett, Taxi, DraftFCB and others – to sell them on using Google’s products to sell their clients’ products.

The advertising giant has just begun this effort in Canada. “In the U.S., I’m 26 people,” Mr. Green said. He only officially began this job on Jan. 1. Traditionally, the company has reached out to media agencies – the firms that actually buy the ad space on television, in newspapers, online, wherever it is needed – to convince them to consider Google in their budgets.

However, it has also recognized that, to get a bigger slice of those advertising budgets, it has to be top of mind for the creative agencies coming up with campaign ideas.

“While Google and digital is on everyone’s mind, it’s not necessarily the first thing on everyone’s mind ... digital is often an adjunct to the main campaign, planned and executed after the offline media,” Mr. Green said.

Google has dominated its peers in online ad sales for years. It rakes in billions per year in advertising revenue (updated numbers will emerge next week when the company reports its full-year earnings for 2013). And it is gobbling up an increasing share of the pie: a report from eMarketer in August estimated that 53 per cent of all spending on mobile ads, worldwide, goes to Google, and that it owns about a third of all global digital ad revenue.

But analysts have noted that Google’s core revenues from search ads (those paid results that pop up in yellow when you search for something, for example) have experienced slowing growth; especially among small and medium-sized advertisers, which are increasing their spending on Facebook. In a note this week, Pivotal Research Group analyst Brian Wieser noted that “the market is increasingly saturated and competitive” and that larger brands are the ones “picking up the slack with search, display [i.e. online banner] and video spending.”

Google is hardly in trouble yet, but it is invested in getting brands to think about it as an advertising platform that can be a central part of their campaigns, as it strives to protect its dominance.

In the past, it has done this by going around ad agencies entirely: Google’s Project Re:brief in 2012 and Art Copy & Code program that started last year, saw the company pitching its services directly to major advertising spenders such as Coca-Cola and Volkswagen. Now it wants their agencies on board – including in the Canadian market, where clients expect digital to play a central role in their campaigns but where budgets are often stretched.

“To date there has been a lot of basic education and inspiration but we’re starting to get down to actually collaborating on live briefs, and that’s where the rubber is really going to meet the road,” Mr. Green said.

To inspire agencies such as John St., he presents cases where Google’s tools have made campaigns shine.

For example, as part of Snickers’ “You’re not you when you’re hungry” campaign, agency AMV BBDO worked with Google UK to identify common misspellings of the top 500 search terms people enter in Google’s search engine – 25,381 misspellings in all including “beleive,” “privalege,” and even “YoTube.” Whenever one of those words popped up, Google delivered its usual search results (with the helpful “did you mean ____” at the top of the page suggesting correct spellings). But it also delivered a paid search result pointing people to http://www.yourenotyouwhenyourehungry.com/, with the message, “Yu cant spel properlie when hungrie Grab yourself a Snikkers.” The search advertising campaign reached 558,589 people in two days. According to Mr. Green, it cost roughly $3,000; next to nothing compared with many other forms of advertising.

As for that low-budget campaign from Guatemala Mr. Green cited: It was for a trendy sneaker store known as Meat Pack. Rather than looking for a wide reach, like Snickers, the campaign targeted people who were already loyal to the brand, to try to prevent them from shopping elsewhere. Agency 4am Saatchi & Saatchi used Google’s geo-location technology to identify people who had the store’s app downloaded on their phones, and were in other shoe stores. It then sent an offer for a special discount that started at 99 per cent off and counted down – the faster they ran to Meat Pack, the bigger their discount. The campaign won awards in the Mobile category at the Cannes advertising festival in 2012.

“We are betting the farm on mobile,” Mr. Green told the audience at John St. “We believe it will be the primary mode of access to the Web.”

Google is planning to hire four or five more staff to augment its agency outreach in the coming months. Digital is approaching the same level of advertising spend as television attracts in Canada. The challenge for the companies that compete for digital ad revenue is to be seen as a creative resource by those agencies – and by the marketers who are spending the money on advertising.

“It’s not a question, it’s [digital is] part of the mix now,” said Jane Tucker, managing director and partner at John St. “All clients know that ... passive advertising – TV, print, or whatever – will only go so far.”

John St., for one, does not currently use Google as readily as it turns to Facebook, which is more “inherently social,” Cas Binnington, an executive producer for digital at the agency, said. Mr. Green’s talk was a reminder of how its various tools can play a bigger role – a huge part of Google’s marketing strategy for itself.

“We’re the nerds in the garage building the car, and the agency goes out and drives it,” Mr. Green said. “If we want to go as fast as possible as a team then we need to talk to the drivers, tell them what all the buttons do and then listen when they tell us how it performs out on the track. It’s the best way to perform as best as possible for the clients.”

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Google’s advertising still dwarfs social media powerhouse Facebook, but the latter is seeing accelerating growth. Facebook is far from the only competitor, but it is often top of mind for agencies thinking about how to structure a digital advertising campaign.

Google’s advertising revenues

Q4 2012: $12.08-billion, up roughly 19 per cent from the same period the previous year

Q1 2013: $11.9-billion, up 16 per cent

Q2 2013: $12.06-billion, up 15 per cent

Portion of Google’s revenues that come from advertising: 91 per cent

Portion of Google’s total consolidated revenues (including Motorola segment) that come from advertising: 84.2 per cent

 

FACEBOOK

Facebook’s advertising revenues

Q4 2012: $1.33-billion, up 41 per cent from the same period the previous year

Q1 2013: $1.25-billion, up 43 per cent

Q2 2013: $1.6-billion, up 61 per cent

Q3 2013: $1.8-billion, up 66 per cent

Portion of Facebook’s revenues that come from advertising: 89.2 per cent

Source: Company reports

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