• by Joe Mandese  @mp_joemandese, December 5, 2006

After a brief period of relative calm, Madison Avenue's Google angst resurfaced Monday when one of the world's top ad executives said he still isn't sure whether the online search giant is a "friend or foe" for the advertising industry. "Frienemy is the best way of describing Google," Martin Sorrell, chairman-CEO of WPP Group, the world's largest buyer of media said Monday during a luncheon keynote at UBS' media conference in New York.

Sorrell said WPP executives coined the term after meeting recently with Google's top managers on a strategic planning session, which also revealed that WPP is not Google's single largest customer, spending more than $150 million a year on Google's search and advertising platforms.

"On the friendly side, they want to work with our top 50 clients," Sorrell noted with a hint of circumspection. On the other hand, he ticked off potentially competitive developments taking place within Google, including the fact that "they have hired people to make ads," its acquisition of radio ad sales firm dMarc Broadcasting, it's foray into two print advertising sales tests, and the fact that it is giving advertising research away for free via its Web site.

Sorrell's comments come more than a year after Google tried to squelch fears that it was muscling into Madison Avenue's turf, even though it has created systems that might appear to disintermediate some traditional agency services, especially among smaller advertisers. Google has defended its hiring of media planners and buyers as a means to understand how to better service agencies and advertisers, not to compete with traditional advertising services.

Sorrell, meanwhile, noted that it's not simply Google that is putting competitive pressure on traditional agencies, but other new and emerging technology solutions for creating advertising and planning and buying media. He cited WPP's own recent investment in Spot Runner, an online advertising placement firm that Interpublic, CBS and others also have invested in.

During a recent meeting with WPP's senior management team, Spot Runner President-CEO Nick Grouf demonstrated the ease of use of the system, creating an ad for WPP client Century 21 and planning and placing its media buy all within five minutes via a personal computer.

"Nick made an ad, planned it and bought it in front of people in five minutes," recalled Sorrell. When Sorrell asked Grouf if the same process could be scaled for big advertisers, and Grouf replied, "yes," Sorrell said, "You could see the blood draining away from the people who run our businesses."

Sorrell said he expected to see other entrepreneurs to develop similar technology solutions making advertising and media services more turnkey and easier to use, which will put even greater pressure on Madison Avenue's traditional business models, though he noted that digital and interactive media are WPP's fastest growing segment, and that he wished it was an even bigger part of its revenue stream.

Interpublic Chairman-CEO Michael Roth expressed similar thoughts during an update on Interpublic's status to attendees at the investor's conference, and also cited Interpublic's investment in online social community Facebook.com.

Roth noted that some of these new platforms are beginning to supplant traditional media, pointing out that Interpublic client the U.S. Army's new ad campaign broke not on the major TV networks, but on YouTube.

Asked by New York Times advertising columnist Stuart Elliott if these new "thrifty" approaches to buying media and placing advertising were as profitable for Interpublic's margins, Roth demurred, noting that the traditional media will not "go away completely."

Roth also denied recent reports that Interpublic is in talks to be sold to Publicis Groupe.

Later, during his keynote, WPP's Sorrell, quipped that, "It wasn't a vehement denial."