Google’s UK & Ireland managing director Eileen Naughton flew in to Advertising Week Europe from Paris to speak with broadcaster Clare Balding. After the session The Drum caught up with her to talk about Google's ambitions outside of search, and why the UK is a hotbed for digital trading talent.
Given how much Google is diversifying into areas such as health and auto, do you see a time when you will stop calling yourselves a search engine?
Inside Google we don’t see ourselves as a search engine, though of course it’s our most ubiquitous app. We see ourselves as provisioners of technology and great computer science solutions that can improve people’s lives. So yes, the health science is in there. It’s a tiny initiative relative to the size of Google today but we are investing in it. We hired the former chairman of Genentech [Art Levinson] and he is running Calico the life sciences area – to look at extending lives and treatments using technology. We are not a pharmaceutical company but we are trying to understand health systems through mining data. What we are great at is computational science and data modelling. We also do experiments in energy consumption where we are trying to re-engineer batteries so they consume less energy.
And really the self-driving cars is an experiment but we have registered as a car manufacturer in the US – that’s an objective to really improve the outcome for the planet, so we use less fossil fuels, for the waste involved in idle waiting in traffic jams, the deaths and injuries that occur: a million-and-a-half-deaths occur each year from car accidents, and that again in injuries. Imagine if you could remove all that and reduce congestion. The fact Los Angeles has 30 per cent of its real estate in the centre of the city handed over to parking lots – imagine if they were parks. These are some of the things that inspire engineers to do great work and think outside the box.
"We have some of the sharpest shooters in the [programmatic] industry here in the UK."
But our core business is and remains the stuff most consumers know us for - Google search, YouTube, our ads business, our ad technology and the way we help content publishers make money. Sometimes that is forgotten but in the year since our Google IO developer conference last May we paid out $7bn to developers that year alone. Then I believe we paid an additional $14bn in payments to publishers last year when we monetised their content on Google.com. So there is an enormous amount of economic stimulus Google is putting back into the digital ecosystem. We see ourselves as this platform, and we do well when others companies do well. It’s an enabling technology. But our core business will always be advertising and things that support advertising, with this content engine on the side.
What opportunities should advertisers be most excited about currently?
Every advertiser should be excited about mobile as it means they can connect very personally with their audiences on an individual level. So everything from how they use loyalty programmes and geo-targeting to stimulate a promotion. When you know when I’m walking by Starbucks, or can geolocate me inside a mall maybe you can provoke me to go in and finally get me to buy the towels I had been planning to. The ability to understand the signals and the consumers’ behaviour and where they may be and offer them relevant promotions at that moment is pretty profound for mobile. But even beyond that we have a capability now – we can deep link from search right into your app. So if you’re a game developer you can take them right to your app to get them to sign up. It’s new for Google to do that, and it’s powerful because that’s where consumers are spending a lot of time.
Programmatic trading remains a continuous theme in how media is traded, how do you see this progressing?
We are heavily invested in this area, we have been a catalyst for the industry for this area with Doubleclick, it’s one of the highest growth areas of our business. We disrupted our own business model by building our own automated platform and ad exchange and bidding tool that goes on the front end providing those automated platforms to agencies and clients direct. That was an entirely new way of Google’s doing business. We still do things the way we used to with account managers, but there is now this amazing automated way of buying and selling media for publishers and advertisers that is a lot more like a financial exchange than traditional media sales monetisation.
We have seen enormous uptake in this market and that is what has surprised me the most – how fast and sophisticated that is here in the UK. It’s not surprising that the UK is the number one financial technology market in the world. We have more developers in and around here – the UK is the biggest hub for financial technology –so it doesn’t surprise me that we have taken that expertise in the UK and turned it on media.
Even TV can now be transacted digitally, so increasingly all advertising that is digitally enabled, which is TV, will be transacted through these financial exchanges for media – it’s inevitable.
You see now all the big media buying agencies in the UK – their TV buying arms have come to Google now and want to buy video that way. So their TV buyers want to buy YouTube not just their digital buyers – and that’s a very significant shift. So they are planning their video campaign – not their TV and then their digital as they may have in the past.
Are traditional creative agencies also keeping pace with this?
Not as an entire cohort but they are getting there. There are so many excellent digital-first creative agencies who do it and are at the cutting edge for creating immersive experiences for digital consumption and they are creating more ads with digital at the beginning of the plan rather than the end. Most creatives now understand they can’t come up with the TV solution with a bit of digital tacked on, they have to orchestrate how they want this ad communication to work, and where you start on that journey. Lots of the luxury advertisers are going for these rich immersive brand digital experiences because that they could never afford to do so on TV because they are three and a half minutes long – you can’t buy three and a half minutes of airtime affordably. So think of how much richer the palate is for creatives when they have more time. They love creating video – so they can create up to seven minutes of video for web consumption and viewers will watch it if it’s beautiful, and interesting.
What are your priorities for the next six months?
The UK is a very important market for Google – it is our most sophisticated developed market. The UK is already 50 per cent digital, therefore we have some of the sharpest shooters in the industry here in the UK.
So it will be about continuing for us to provide solutions that make the businesses that work with Google successful, that’s our number one goal, and if we are good at that we will have economic impact in the UK. We have 200,000 advertisers in the UK between the large and the tail, that use our products and services to connect with customers, and it’s a very important source of revenue for hundreds of businesses in this country, and we see that as a very important obligation. So we do our part to help make the companies prosper, help impact the economy and culture of UK favourably.