“The purpose of my talk today is to confront fear. Fear of the future and fear of Google.”
So began Bruce Goerlich’s presentation at the 52nd ARF Convention session titled “Is a Convergence Mega-Network in Our Future?” Since Bruce had helped create the vision of GoogleWorld, this opening was not what I had expected.
Bruce is Executive Vice President and Director of Strategic Media Resources at ZenithOptiMedia USA. Late last year, he was one of the attendees at the ARF executive-only workshop in New York, exploring the future of advertising. In a breakout session intended to craft a ‘wild card’ scenario for the next few years, Bruce first raised the idea that Google might have aspirations to become a mega-network, controlling consumer access to content, and, in turn, advertiser access to consumers.
The rest of us leapt on this idea, and the idea of GoogleWorld was born. The basic concept was that Google would offer free wi-fi access to everyone and provide ready access to all forms of online content - TV, movies, music, consumer-generated media, radio, etc., - in return for people agreeing to see advertising. So for the price of seeing ads, anyone could access anything, anytime, through any (mobile) device. In reality this is not so far fetched. As Bruce reviewed today, Google already provides mail, video, maps, mobile, classifieds, and offers wi-fi in a couple of locations. Essentially this is a back-to-the-future scenario with Google taking the place of the broadcast TV networks of the 1960’s.
Taking the scenario one step further, the breakout team envisaged that Google might offer the option of avoiding ads, in return for a small fee. This would create a scarcity of ad inventory for advertisers, particularly as these opt-outs were likely to be a desirable target audience. If Google then stepped up its role as intermediary, negotiating with each consumer to decide how many ads they will see per day, and, depending on how desirable a target they are, whether they will be paid to see a minimum number of ads, it could generate even more revenue. Advertisers would bid to buy the available exposures. Furthermore, Google could provide behavioral profiles that ensured that consumers only saw ads for products and services most likely to be relevant to them.
That’s where the workshop left the topic. I had expected Bruce to expand on the model, but he did not. Instead, he suggested that Google, far from being the omnipotent behemoth of our wild card scenario, was in fact vulnerable as a result of its run-in with the U.S. government over search records, censorship of search results in China, and the massive problem of false click-through. The next speaker, Eric Singer, General Partner of the Singer Congressional Fund and Managing Director, Burnham Hill Partners, lent fuel this fire, suggesting that Google was vulnerable due to its minimal customer relationship, reliant on free content and under threat of a possible next generation search engine. So this time around Bruce sought to allay fears of the ‘wild card’ scenario by concluding that, while Google continues to expand its services left, right and center, its basic revenue model remains the traditional ad-supported one, simply more targeted and more relevant. I don’t know - I rather liked the wild card scenario. It sounded much more compelling. What do you think? Is GoogleWorld in the cards?
(34 votes, average: 2.62 out of 5)
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March 27th, 2006 at 12:06 pm
Ah … the joys of trying to guess the future!
From an economic point of view, this is fascinating. Content can be paid for by the consumer, or funded by corporations who will in turn expect some benefit for footing the bill.
I wonder what Steve (Freakonomics) Levitt would make of it. I’m sure he’d advise us to start looking for the incentives. The key unknowns for me are about quality and effectiveness. The quality of content available will determine the value to consumers. And the continued ability of creative and media agencies to come up with campaigns that drive brand growth will dictate the value to advertisers.
The difficulty here is predicting not just the development of media technology, but also the future of Google.
My prediction is that we’ll have a partly ‘Google-world’. Some consumers will be prepared to pay avoid ads (either by paying for content direct, or by investing money and time in tools that help them minimise exposure) and others won’t. Advertisers will chase some consumers harder than others and the incentives will maintain a kind of balance. This will be much simpler if there’s a single intermediary like Google, but if not, a market will develop for providers both offering paid content at one end and paying people to receive ads at the other.