Agency: Fallon London
campaignlive.co.uk, Friday, 14 December 2007 12:00AM
Google didn't want this award. Not because it doesn't value the praise its successes garner; nor because the company is particularly prickly or difficult (more on that little facet of its personality later). No, Google didn't want to be Campaign's Medium of the Year because, in the rather terse words of a Google press officer: "Google is a search engine, not a medium."
But we beg to differ. There are many things that Google is not, but a medium is not one of them. As the internet's leading search site; the owner of YouTube; the homepage for countless millions; and a purveyor of the majority of online advertising, Google is the very epitome of the modern media machine. And what a year it has had.
Let's start close to the end, so to speak, with the company's most recent numbers. Global third-quarter revenues stood at $4.23 billion, up 57 per cent on the previous year. Net income stood at $1.10 billion, a 29 per cent rise year on year. Google UK contributed some $661 million - 16 per cent - of that revenue, nudging the company ahead of ITV1 for the first time. Yes, Google has finally shown that it is possible to generate more income from sponsored links than the UK's largest commercial TV channel can from 30-second spots.
However impressive it may be, Google hasn't won this coveted title for numbers alone. This year, the company has introduced new products and tweaks; in the UK it has established a sales structure that addresses at least some of the major industry concerns; and has continued on its acquisitive trail, with the outcome that Google is now embracing the very thing that it claimed it would never touch - display advertising.
In the UK at least, display remains small and limited to partner sites and YouTube. Perhaps it's a legacy of Google's famously prickly relations with media agencies, but few report much interest from clients for display advertising on the user-generated video site. That said, the offering is relatively new, and if Google can come up with a better way to market its innovative video overlay technology, which puts ten-second semi-transparent ad overlays over video clips, usage will pick up. The fact that the Google chief executive, Eric Schmidt, has set his sites on display will make this a certainty.
Display revenue will never come close to search, though, and Google is unlikely to earn back in adspend the $1.8 billion that it spent on YouTube last year.
Google now has a 43 per cent share of online adspend in the UK, the vast majority of which is in sponsored search. Its AdWords product alone could win Medium of the Year, such is its ubiquity and power.
This year, Google made a number of tweaks to the Top Ads element of its sponsored search, tightening up the Google Quality Score element of the product to prevent low-quality ads with a high cost-per-click from taking the top spot above bigger brands.
That said, however, the changes fell short of the IPA demands that the company put in place to stop brands from engaging in guerilla search marketing - buying rivals' search terms to appear in their place - but the improvements were broadly welcomed.
The company also scrapped its Best Practice Funding programme, which rewarded agencies for making significant increases in their spend with Google. It was a move some agencies welcomed, pointing out that the tiered structure favoured the large agency networks regardless of the quality of their search product.
Under Mark Howell, the UK sales department continues slowly to alter perceptions that Google is an evil empire that would rid the world of all media agencies if that streamlined its operations.
As one media agency chief put it: "Google's arrogance is improving, but it still makes ITV look like a bashful child." Clearly, there's still more work to do when it comes to winning hearts and minds.
This year, Google's acquisitions were less high-profile than last year's YouTube splurge, but no less seismic. Its agreement in April this year to make a $3.1 billion cash purchase of the ad-serving technology company DoubleClick will shore up its display ambitions, although a number of rivals, including Microsoft and Yahoo!, have urged US regulators to investigate the deal, and may yet file formal objections to its ratification.
The Guardian recognised the potential of the web long before its rivals. While others scrambled to find the formula that would make digital news profitable, it has stuck religiously to the founding model of 1999 - free content in a defined site structure.
Eight years on, its substantial investment in digital has paid dividends. It is still the leading UK newspaper website, and recently overhauled its platform to allow more enhanced targeting opportunities and greater flexibility for advertisers. It has embedded video sensibly - using it to support news coverage, rather than promising a full-blown TV channel.
And its range of additional products, including the blogs and "Comment is Free", engages in a much wider dialogue with readers, building global communities and, at the same time, boosting loyalty.
But most impressive of all has been its reach. This year was the one where it broke the shackles of the UK market to become a truly global brand and genuine alternative to the likes of the BBC, CNN and The Economist. In June, the Guardian Weekly, a network where users can file stories and upload pictures from around the world, launched along with GuardianAmerica.com to cater for its growing US audience. The website currently attracts 6.2 million unique users in the UK, compared with 16.7 million worldwide.
The outdoor company deserves its nomination for transforming, along with London Underground, the face of advertising on the Tube. After regaining the TfL contract in 2006, this year saw the roll-out of a £72 million investment programme to update and overhaul formats on the Underground.
Many of the innovations from CBS - including digital panels on Tube escalators, the launch of a pioneering "Post-it note"-style dry-posting technology that allows for faster, cleaner roll-out of campaigns, and, at last, the roll-out of XTP, or cross-track projection, which offers giant, high-definition digital screens on Tube platforms - have created genuinely new opportunities for advertisers.
Also, the CBS sales team has been inventive in selling the new solutions, and the changes to Tube advertising will have the side-effects of generating greater revenues for London Underground to put back into the system, as well as reducing environmental waste.
It will take a few more years for the roll-out to be finished, but CBS has got off to a good start, and has generated a lot of excitement.
Recent winners: The Economist (2006); Channel 4 (2005); The Independent (2004); Sky (2003); five (2002)
HIGHLIGHTS OF 2007
January: Jonathan Gillespie, the former head of radio at OPera, joins Google as agency leader.
April: Agrees to buy DoubleClick for $3.1 billion.
May: Research reveals that Google is the most visited website globally in the month of May, reaching almost 70 per cent of internet users.
June: Launches a paid-for search model that means advertisers only pay Google when a click-through results in a transaction on their site.
August: Reconfigures the formula it uses to determine which ads run at the top of search results to improve advertisers' control. Launches display ads on YouTube by using semi-transparent overlays that run across the bottom of clips.
September: Launches AdSense, which allows mobile publishers to run ads that are relevant to the content of the site. Google also reveals it will axe its Best Practice Funding programme.
October: Third-quarter pre-tax profits rise to $1.47 billion, and revenues rise to $4.23 billion. Google shares push through the $600 mark for the first time in the company's history.
November: Joins forces with MySpace to create a social networking platform designed to rival Facebook's F8 model.
This article was first published on campaignlive.co.uk