Gotlieb’s background well served GroupM’s global expansion. “The fact that I didn’t grow up in the United States was incredibly helpful as the business began to morph globally,” he said. His techie background better prepared him to understand and compete against the Googles and Double-Clicks. His friend Michael Kassan, who had a successful advertising career and founded and is the CEO of Media Link LLC, which serves as a consultant to Microsoft and AT amp;T, among others, remembers the time he and his wife visited the Gotliebs’ Westchester home and watched a movie in his screening room. “In Hollywood, a screening room is a show-off room,” he said. “At Irwin‘s, he takes you behind the wall and shows you the wiring and how he does it himself.”
Gotlieb tries to stay a step ahead. When digital recorders allowed viewers to dodge TV ads, he pushed to place his clients’ products in programs, establishing a production arm of the agency to do it. He grew his digital staff, which now numbers more than two thousand employees. He invested in various companies with technologies that gather consumer data. Invidi, one of those investments, is a software system that resides in a cable box and monitors viewer behavior. It collects data on what we watch, what we like, and how much time we spend watching ads, and can correlate reams of television-watching data with other data collected from motor vehicle records, credit cards, purchase cards, and other credit-rating services and databases. The technology allows the advertiser to show different ads to different potential customers watching the same program.
Gotlieb doesn’t think Google, outside of its search advertising, can rival GroupM because most advertising was “not in the sweet spot of their capabilities.” Like Mel Karmazin, he believes that engineers cannot replicate what his sales force can do. They can’t do product placement, an increasingly popular form of advertising requiring subtle judgment to avoid offending viewers. They miss the “art” part of selling ads, the judgment required to build a brand, the relationships that seller and client forge and that spark ideas. “As complex as the Google processes are, as robust as they are,” Gotlieb said, “there is an inherent oversimplification because it is purely quantitative.”
ASSUMING THAT GOTLIEB is truly undaunted by Google as a competitor, his would have been a lonely voice in the advertising community. Sorrell, the CEO of the WPP Group, worried that DoubleClick would allow Google to “take our client data.” He began to refer to Google as a “frenemy,” not quite a friend or enemy but a rival power to guard against. With mounting anxiety, executives noted that Google TV Ads was selling advertising for EchoStar’s fourteen million set-top boxes and for Astound Cable, a small cable company. Google’s sales pitch was that it could find new local advertisers and help advertisers better locate their targeted audiences. The way it works, according to Keval Desai, the product manager and director for the project, is that Google finds the advertisers through ad agencies or by dealing directly with companies that advertise and brings them to one of one hundred satellite channels. Once the ad airs, Google has software in the set-top box that collects data and analyzes the results. Among the things they learned, he said, turning to a series of slides to make his point, is that when grouped together the shows that have “less than a half of one percent audience share can have a share equal to ESPN.” Unlike the Nielsen ratings, which make an estimate of the audience’s size by extrapolating from a relatively small sample, Google takes a digital measurement of actual homes. Desai said they learned that advertisers were spending half their dollars on the twelve largest cable networks when they could be reaching audiences of comparable size by grouping smaller networks together. Because the ESPN and other large cable network spots are much more expensive, Google is saving advertisers money, removing the “inefficiencies,” as Google had told Mel Karmazin they would. Or as Desai now said, “This slide fucks with the magic!” Through a digital box “we can measure second by second” what ads and programs viewers are watching or turning off, and share this information with advertisers within a day.
As Google’s director of media platforms, Eileen Naughton, said, “It is absolutely our intention to be in every cable box.” To accomplish this, she knew, would require the cooperation of the cable companies that own the box. And that cooperation depended on trust. Naughton said, “Google aims to improve the advertising quality in traditional media.” If traditional media trusts her word, then Google is servicing them, not supplanting them. If they mistrust Google, they will never allow its software to invade the cable box. A decade ago, when Bill Gates tried to persuade the cable companies to trust Microsoft to be the operating system for digital cable boxes, he didn’t get past first base.
Television executives had reason to be paranoid about the seventy billion dollars spent each year on TV advertising, as did advertising agencies. Not only was Google telling its customers they could do a better job of targeting ads and telling them which spots worked, but it was also extolling its array of other products. Among them were Google Print Ads, which by early 2008 was selling ads for seven hundred newspapers and allowing them to use an “ad creation tool” to craft inexpensive advertisements; Google Audio Ads, which was hoping to build on the deal it had made with Clear Channel Communications, the largest radio station owner in the United States, to sell 5 percent of ad inventory; and Google TV Ads, which on the Google Web site is described as “a searchable directory of specialists” to create television commercials. Was Sorrell right? Was Google intent on taking over the media buying function? “Yes, he’s right,” said Terry Semel, the former Yahoo CEO. “Google and Yahoo are always working on platforms to sell ads. All [of the new Google programs] at the end of the day will have the capability to sell ads in any medium.”
So why would a company like Procter amp; Gamble need a middleman media buyer like Irwin Gotlieb’s GroupM? Smita Hashim, the group product manager for Google Print Ads, said “that’s a good question,” and conceded that, “the roles will start shifting.” But Hashim, like Desai and others at the company, quickly assert that Google requires the “expertise” of ad agencies. With passion, Desai insisted that Google is engaged in a “win-win” game. If these programs succeed, the advertising revenues of traditional media as well as Google’s will rise. This is a familiar Google refrain, one that relies on what might be called Google “magic”: everyone wins. If old media gets with the program, makes a push to be more Internet-centric and share with Google, there will be no losers, no zero-sum games in this brave new digital world.
But these claims did not allay the anxiety of Sorrell, who feared Google would vie to obviate his creative teams as well as his sales and media-planning teams. The wellspring of this concern was not the Google TV Ads program, which does not generate the kind of slickly produced commercials his agencies create. He was troubled by Google’s hiring of Andy Berndt, who was copresident of one of Sorrell’s ad agencies, Ogilvy amp; Mather. Berndt was recruited in 2007 to run a new Google unit, the Creative Lab. Google denied that this was an attempt to enter the advertising business, and Berndt said his job is to focus on the Google brand, “to remind people why they love Google,” and to create ads only for his new employer. His staff consisted of just twenty people, he said, and would expand to only thirty-five. He said “the short version” of why he joined Google is simple: “When the spaceship lands in your backyard and the door opens, you just get in the spaceship.”