Google is unlikely to displace agencies — and probably has little incentive to go that route — but its wide-ranging ambitions could mean it encroaches on agency turf. Witness Google’s recent deal with Heineken to use its many digital platforms to achieve “brand-building reach and the ability to carefully target their audience.”
That sounds a lot like the work of a digital agency, but Google’s forte is not, nor will it ever be, the kind of expertise necessary to create, manage and optimize digital campaigns for a major brand. Brands will probably never use a single source as agency and ad exchange, but they do want to partner with Google on the elements of digital advertising where it holds an immeasurable competitive advantage. Google has unrivaled access to search and behavioral data.
“The key part of our strategy is to keep breaking grounds in beer communication,” said Alexis Nasard, chief commercial officer at Heineken. “The opportunity exists to connect with our consumer in innovative ways.’’ Heineken’s desire to innovate across multiple platforms and devices means that Google and Heineken will probably be working on rich media ads for mobile and branded content, such as Heineken’s successful “The Entrance,” which garnered 4 million hits on Youtube. Content distribution, display, mobile and analytics seem like the whole pie, but Google can’t replace the agencies on the creative side.
Google is starting to redefine what agencies do. For example, WPP’s GroupM, the parent of audience-buying platform Xaxis, which holds data for 500 million unique profiles, offers audience-targeting for online and offline campaigns. Agencies today are developing past the older paradigm of providing creative and brokering data. They are now moving towards a model that merges the digital campaign customization abilities of a traditional agency with the technology stack of an ad tech company and the wealth of insights of a third-party data vendor.
The expansion of Google’s brand partnerships, such as the deal with Heineken, threatens only the paleo-agency that is operating in a “Mad Men” fantasy, unaware of the importance of data competency and content optimization. Google is slowly taking over many of the roles of traditional agencies, but those agencies are disappearing, as data-driven campaigns enter a golden era of industry acceptance.
Big data’s rise helps Google win friends and influence the shape of the industry, but it also brings agencies out of the dark ages of siloed marketing strategy. Google as an “agency” won’t happen, but a full-scale redraw of what we mean by “digital marketing agency” will.