According to Schmidt's aspirations, Google may ultimately have the ability to offer sales, not just the media that generates sales. From any retailer's perspective, that kind of scalable performance-based guarantee is indeed an enticing value proposition.
Analysts used the word "sea-change" in describing the factors underlying Google's stunning earnings announcement on October 20. Imagine the sea-change, and its impact on ecommerce, if this fantasy of a global commission-based digital marketing product were to become reality.
Let's explore this fantasy world a bit more. It's no wonder that in Schmidt's fantasy, there is no role of the interactive agency, the advertising agency, or the search engine marketer.The dialogue happens directly between Google and an advertiser. After all - if you are selling sales, not media, the role of any intermediary, however strategic, gets marginalized.
But wait. There seems to be another, separate, fantasy. Also in the Times article, Hansell reports that Google has set its sights on securing branding budgets, a change from the direct response budgets that have been Google's bread and butter. We have seen examples of an increased focus on branding budgets with Google's nascent site-targeted display media products, and in the ubiquitous brand-impact case studies distributed by Google to its partners and clients. Let's call this fantasy #2.
Herein lies a conflict. While fantasy #1 may ultimately involve the disenfranchisement of agencies, fantasy #2 requires strong collaboration with them. It seems as if Google will face some difficult navigation. Selling "sales" directly to advertisers may circumvent Madison Avenue; however, the pursuit of branding budgets will likely require closer interaction with agencies.
So which is it, competition or collaboration? Since, at least at this point in time, Google has more to lose than to gain by circumventing or alienating agencies, the industry is more likely to see collaboration. However, as Google grows, there is little doubt that it will begin (or as some might believe, continue) separating agencies of all types into the category of either "friend" or "foe." Foes will be those that do not speak and believe the language of technology and accountability that Google does; those who do not--or choose not to--"get it." Friends will be those agencies and consultancies--both interactive and traditional--that continue to explore ways to leverage digital media to build online brands, while never losing focus on the accountability that has molded Google--and digital marketing--into what it is today.
Those who do believe that Google will continue to redefine how media is created and sold must also be prepared for the casualties that will litter the path of that victory.