Cannes: Executives from Google Inc. and Yahoo Inc., which recently announced a tie-up in Internet advertising, spoke about the controversial deal when they were queried about the “love affair” at the Cannes International Advertising Festival.
The agreement, which would allow Yahoo to place Google ads on its site and collect revenue, was discussed at a session entitled ‘From Metrics To Brand Build—Online’s Next Challenge.’ Martin Sorrell, chief executive officer of WPP Worldwide, quizzed the Internet companies.
Leveraging brands: The Cannes Festival Palace which hosted a debate between technology companies on Friday (Photograph by Eric Gaillard / Reuters)
“The deal allows us to use Google’s coverage for better results for users, better monetary rewards and better returns for advertisers. It’s not based on exclusivity,” said Hilary Schneider, executive vice president of the global partner solutions division at Yahoo.
That was in reply to a question by Sorrell about the nature of the “love affair” between Yahoo and Google.
Henrique de Castro, managing director of European sales and media solutions at Google, said the Internet, unlike advertising, was an open system where competitors could be partners as well as clients.
“In advertising, you may not be able to work with Omnicom or Publicis, but the Internet is very different,” he said. “We told Yahoo to help us serve better on search but we continue to compete in other areas. We are both competitors and collaborators.”
Some critics, including software company Microsoft Corp. that tried to buy Yahoo!, have said the Google-Yahoo! deal may lead to reduced competition in Internet advertising.
Kevin Johnson, president of the platforms and services division at Microsoft Corp., said here that the tie-up could give rise to monopolistic practices and there could be consequences.
“The industry is better served with N number of players where N is greater than 1. But we as a part of our strategy will continue to invest in end-to-end class solutions. We will concentrate on new user experiences and new business models,” he said.
When asked by Sorrell about the possibility of monopolistic practices creeping in with the Google-Yahoo alliance, de Castro answered that Google was a company built on collaboration. “Google is the easiest way to switch to another site, whether it’s Yahoo or Microsoft. It clearly shows that we are not about monopolistic control,” he said.
Ron Grant, president and chief operating officer of AOL LLC, said that unlike other platforms, the Internet is not a “winner take all” medium and there will be opportunities to compete.
AOL remains focused on display advertising, and not as much on search, which it would rather leave to its competitors. “We need to make display as easy to buy as search. We have the largest scale in display in the US,” Grant said.
Sorrell suggested that technology companies were looking to “disintermediate” advertising agencies, especially because one of his own creative directors was poached by Google.
Google’s de Castro discounted the suggestion. “We are not ad agencies; we don’t do strategy and planning like ad agencies do. We want to build technological infrastructure on existing infrastructure,” he said.
He said WPP’s creative director was probably poached because Google, just like other communities, needs branding specialists to leverage its various properties in the market. “..when there’s an idea that gets us excited, we’d like to try it, but the intention is not to replace the ad agency,” he added.
Lastly, video content online will grow exponentially, the session heard.
“While on TV, viewers are passive, there is an active engagement on video online,” AOL’s Grant said. “This level of engagement is valuable for advertisers,” he said.