Google King Of All Media? An OMMA Debate
- by March 23, 2007
That was the question put to panelists earlier this week at OMMA Hollywood, who debated the question of whether Google will become the king of all media or just a one-trick pony.
Catch a quick and lively post-debate video debate.
The search giant has made forays into online-based media auctions and offline media planning, among other endeavors, as it looks to extend its expertise and influence.
But what does the future portend for Google, whose online success may not necessarily translate into the offline media world? "Google needs an Act 2," maintained Jordan Rohan, managing director of RBC Capital Markets. He argued that if Google doesn't figure out how to move beyond search ads, the "law of large numbers" will inevitably shrink revenue growth down to the 30% range.
Former Merrill Lynch analyst Henry Blodget (who blogs at Internet Outsider) argued against Google as the 800-lb. gorilla of all media. Google, he said, won't be able to sell ads as profitably for TV or radio as in search engines, because it doesn't own or control that content. With search, the "content" is the results page itself--and while Google doesn't own the Web sites that appear in those pages, the company's technology is the engine that generates them.
Blodget argued that in order to be "King of Media" Google would have to create, produce, and monetize all media. Based on those three, Google doesn't have the throne even if it is currently the "richest" company in the media sector. Google doesn't produce traditional media content--not yet at least--even if it does "organize, distribute and aggregate media."
Blodget called it "ludicrous" to assume that because of Google's forays in print and radio, it will encroach into other offline media. In his blog, he said, "Google is acting as little more than a technology enhanced ad-rep firm--one that takes a small cut of the profits (and with big partners, after overhead, the cut is small), in exchange for selling ads. If Google's offline efforts are successful, it will likely become a good partner for media companies, not a competitor."
Taking the pro-Google side, Kevin Lee, chairman and co-founder of Did-It Media Management, said that Google potentially can make TV or radio ads more relevant, which will do a lot to increase the value of advertising. Lee said that nearly half of his biggest clients are experimenting with Google in terms of non-search advertising--mainly through Google's networks.
If Google is to become as successful in other forms of advertising as it has been in search advertising, it will need to build a new business model, according to Joe Marchese, president-CEO, Archetype Media. "Google was very successful because it solved a problem first...it organized the world's information. Text advertising was part of that."
"By one measure, Google is already king of media," Blodget said. "But if the question is will it ultimately take over and produce TV, radio and print [advertising], the mere conception of that is ludicrous. There is a clear distinction between media distribution and monetization, and media production." Google has helped companies monetize their businesses via search.
"I can imagine Google running down here with truckloads of cash to buy SpotRunner because this is so completely right up their alley," Blodget said, adding: "It's a wonderful vehicle for a market that's not completely developed ... and if they don't, Microsoft or someone else will."
Marchese argued that while Google's current technology offers a huge competitive advantage, "no one has proven yet that this is an advantage in serving the needs of other types of media.
Although he took the anti-king position, Marchese said he wouldn't bet against Google. In the Online Spin he said: "It could always buy a TiVo and get to work on solving the problem of organizing and making accessible the world's entertainment (or radio, or outdoor, or social media). It could acquire an upstart technology that has the type of unique DNA tailored to solve brand advertising's issues and supercharge it with its resources, a la Applied Semantics becoming AdSense. Google could do a lot of things, because it has a lot of money and some of the smartest people in the world--but so does Microsoft and Yahoo and IPG and Publicis and..."
