Google: Selling Display Advertising

Brian, it's a pleasure to have you with us. Could you share some context to when you first joined Google?

I joined Google a little more than 13 years ago. I actually joined Google at the time they were acquiring YouTube, so my job was actually to help launch a distinct sales team in the Google world to sell advertising on YouTube, and it was called a Display Team at the time. As folks may or may not recall, back then, Google was selling almost exclusively search advertising, performance-based advertising, and this was the time that Google was diversifying its advertising platforms and products to include video and more display opportunities. So the team that I was involved with starting there was the team focused on video and display.

That was the time that analysts and folks in general were trying to figure out how could Google have spent so much money for YouTube? Because it really hadn't been a well monetized platform at all. It really wasn't well organized, and now in hindsight, it was a rounding error in terms of Google's fiscal position and the revenue that it's generated has been amazing. It's also been a platform that's become, I don't want to call it a standard setter, but has really created the environment for so many new ways of content being created, distributed. So that's when I joined. Very shortly thereafter, Google decided that it did not want to have a distinct display team so we became integrated into the larger sales teams. Google tends to rethink and reorganize and re-imagine how sales teams should be organized every couple of years. So eventually, we essentially became mainstreamed within the organization and not a YouTube standalone organization.

How has the thinking at Google evolved in structuring sales?

Yes, so that could be a whole hour. But one thing has remained true always, and that is that the customer relationship is the primary focal point of any sales, of any organization and it's organized around industry segments or sectors, so that a seller has a set list of clients and they are within a specific industry, so that that seller learns the details and the nuance of an industry. Whether it's financial services, travel, CPG, healthcare – where I spent a lot of time – you learn that. What has gone through different iterations as Google as expanded its offering, is what do partner teams look like? Are they built out around different ad products?

So while I mentioned I started at Google to help launch a YouTube sales team, there wasn't a YouTube sales team, but now there's a person who represents Google at a client and has to be able to talk about search and talk about display and talk about programmatic and talk about video and talk about data analytics. How that gets organized, in terms of partner teams, that's what changes a fair amount, in terms of what's the relationship between that person and the sales team, that person and the client. Are they attached more closely to the product team? Are they attached more to the sales team? That's gone through iterations, but the one thing that always remains constant is this core, what I call pods, this concept of a pod, that is an expert in an industry and has a finite set of accounts that it knows. That's always been true in the 13 years that I spent there. It was the surrounding support, partner, product oriented or service-oriented roles that kind of moved around during that time.

And so can we run through a 101 of display advertising, in terms of the core functions and different stages of the process, between demand side platforms and supply side platforms in display advertising?

If you're a customer and you're purchasing display ads, you are largely going to purchase it through probably one of two entities, but you can't dismiss the role of the agency in this conversation. Because it could be that the end client actually has no idea how their display ads are purchased at all. In some cases, they don't and I believe that that is to their detriment. The ads purchased directly by the end client or the agency can be purchased in aggregate across, a very large network like a Google, who has such enormous amount of inventory across such a wide array of sites, that it’s a simple, almost one stop shopping opportunity. There's also the opportunity to purchase via point players, who are display networks or display experts, who will bring a perception of specialization in display to what they offer to the agency or the client.

In some cases, that expertise is very real where they've built proprietary technology to essentially provide a better mouse trap. In some cases, it's really just human capital applied to the problem to dedicate people to analysis and optimization. I'm going to try to portray a balanced point of view as an ex-Googler, or also known as a Xoogler I think.

Are you familiar with the concept of the LUMAscape and LUMA Partners, the industry private bankers? People who watch this could look up LUMAscape if they don't know it already. Essentially, this investment bank built a map of the industry. When I started in 2007 there was no LUMAscape because things were really simple. Then LUMAscape created their first LUMAscape map of the ad tech world in 2010, I believe it was. It was on a single page. I just checked recently and I think that LUMA now creates and publishes 18 different maps to cover the industry.

So back to the conversation. You've got display buying highly fragmented, because you have all these point players who are representing probably segments of the available inventory on the universe and may or may not bring a proprietary component to it, either technology or high level human capital applied to the problem, which is making the display investment work as best as it can. The end client, in partnership with their agency, has to figure out, where do they get the best performance?

For a long time, display was not held to the same performance standards that search would have been. Search was a performance-oriented ad buy. We're going to go from a click to some transaction. We're going to measure that and we're going to know what our return on investment was. Display was not held to that same standard, for the most part. It may have been held to a higher standard than other forms of media but certainly not the same standard of search. You could get away with buying across several networks, having disjointed reporting functions, disjointed dashboards and hoping for the fact that you get some tonnage and you could get your brand out in front of a bunch of consumers and that, eventually, it would contribute to conversion through some other platform or advertising or marketing activity.

The technology has increased its capabilities and either the owners of the content or the managers of the ad tech can now apply many of the same performance measurements to display that could be applied to search; there's that accountability that didn't exist before. With that accountability the investment gets a larger amount of scrutiny, so now the selection of a partner, either a network or a Google or whoever it is that you're partnering with, becomes much more critical and the investment gets a lot more scrutiny.

Honestly, I've seen that with many end clients who are working with multiple display partners or multiple points between the purchase and the actual serving of an ad, where more than 50% of their investment and their display dollars was not in working media. It was in commissions to various platforms along the path. We've had a highly fragmented world on both the demand side and supply side which has created confusion for the buyer who is aware, and probably inefficient investment for the buyer who is unaware. I'm seeing a path forward, where consistency consolidation seems to be what is required. That's what a Google offers to a certain extent – this consistency and consolidation by having enormous scale – but then being able to tie measurement of your search investment to measurement of your display investment and see how they work together. It's the same with video and even going down the road into offline and how offline contributes to an eventual conversion.

What is the rationale for the advertiser or the client, whether it's the agency or the end client, to use a different network? Is it kind of just, not boycotting Google, but is it that they don't want to put all their eggs in one basket, effectively?

That legitimately exists and I know boycott is not exactly the word you wanted to use, but it's a concept of diversifying one's portfolio. There's a business rationale that says, I should not put all my eggs in one basket; I want to diversify my portfolio. Part of it is, people still buy from people at the end of the day. So if Google comes in pitching math and science, which in large part it will – and I don't mean that in a derogatory way, because the math and science works – and someone else comes in and says, yes, Google is going to pitch you with that math and science, but we've got humans who are going to manage your campaign every day and we're going to be attached to you.

This is grossly oversimplified, but Google could say, with all their automation, it's a set it and forget it world. Our offering is going to be a dedicated account manager who works with you to understand your business and optimize on a daily basis; that will work for a lot of people because they feel they want that attention. That will be part of it as well. The third piece is when an agency is involved, and I don't want to suggest collusion or anything inappropriate here, but they may be aligned with certain networks. There are alignments that happen for business reasons. Maybe they've negotiated some sort of volume deal with the network that they can pass along to their clients. There can be a number of reasons, which in the eyes of the end client, at face value, could all seem very legitimate. They're not experts on the technology. They don't know every logo on the LUMAscape. They're either going to make a decision based on a relationship that they've built or on a third party, an agency that they've hired, to make that decision for them.

How did the acquisition of Double Click change that industry structure in the ad tech world, specifically for Google?

It's really interesting. We talk about portfolio development and it gave Google capabilities in every place in the pipe. Over time, almost every key point in the pipe has been either built or acquired by Google. I mentioned earlier, every point between when an ad gets purchased to when an ad gets delivered to a consumer and its impact is measured; Google has technology for that now. It was one of the single largest pieces in creating a fully threaded pipe for Google.

It obviously created an enormous amount of pressure on other competitors to get smarter faster. It also created enough pressure so a lot of competitors said, this is borderline monopolistic behavior. What is Google's end game here and how do you as an advertiser, want to be treated in that world? Not just diversify your portfolio but do you know that if they own everything are you actually getting the best efficiencies that you can in terms of what you pay in that scenario?
It created a couple of different scenarios that were really interesting. It also created some internal issues where we created firewalls between the DoubleClick sellers and the end ad sellers. There was a sense that, in the market place, if those two bodies were connected to each other, the ad sellers – the teams that I worked with – would have too much insight into the back office that would give us an unfair ad selling advantage.