Google is to collaborate with Publicis as the French advertising giant looks for the best way to drive revenue through the internet…
“Hundreds of Google staff will be installed in Publicis offices around the world to advice on technical issues…”
Paris — France’s Publicis Groupe SA, the advertising conglomerate, and Google Inc., the world’s biggest Internet search company, said Tuesday that they would join forces to develop an approach to digital advertising that was both creative and technologically savvy, a combination they said was lacking in the business world today.
The announcement of a relationship with a major advertising agency is at least symbolically important for Google’s quest to sell ads to bigger advertisers and in other media, such as television, radio and print.
Neither Maurice Lévy of Publicis nor Eric Schmidt of Google, meeting with the news media at Publicis’s headquarters here, would put a value on their partnership, which is not exclusive.
No specifics on what exactly the two expect to produce from their pact. The two CEO’s said that the two companies’ formal relationship began about a year ago. But they asserted that the collaboration gave them a “first-mover advantage” in combining the programming smarts of a search engine with the inspiration found inside ad agencies.
“The resulting tools and business intelligence would not necessarily be proprietary to the two companies, but could help propel the growth of the entire digital advertising industry, they said.”
If the tools are made widely available, it is possible that what emerges could drive the development of “open source advertising,” Schmidt said. Google, which makes its money by placing ads on particular Web sites for other companies, promotes the use of “open” and common technical standards.
The long-term plan to collaborate has been seen as Google putting an end to repeated speculation that it aims to replace the role of traditional advertising groups.
Schmidt, announced plans to install “possibly hundreds” of Google employees in Publicis’ offices across the world. The advertising group behind Saatchi & Saatchi, Fallon and ZenithOptimedia seeks Google’s technical guidance as it aims to strengthen its digital advertising business.
“Google has provided Publicis staff with access to various early-stage advertising technologies. But the relationship with Publicis is not exclusive and does not involve any signed agreement between the companies.”
Lévy said the collaboration would allow Publicis to “grow the business of our clients through better use of the Internet, sending the right message at the right time.”
The news comes one year after Publicis, the world’s fourth largest advertising group, when it scooped up Internet ad agency Digitas for $1.3 billion in Dec. 2006.
“We are telling the market we are being very serious about digital advertising,” Levy said.
Chief executives of both companies highlighted the collaboration during a meeting in Paris. Their efforts include joint sales calls by Publicis and Google staff with advertisers over the past year and a program to begin loaning employees to each other.
“We are sharing our information to help Google develop the right platforms and Google is sharing technology to help us develop the best services for our clients,” said Lévy in an interview. “Google is not going to be an advertising agency,” said Schmidt.
Lévy said: “The world of advertising has to change. That is what we are building for tomorrow. The partnership with Google is not about creating one product. It is about creating a concept that will work across our whole company.”
Not that digital ads lack momentum. Advertising on Internet Web sites and other digital media like video games has become a huge and accelerating business as traditional media like television and print lose customers and advertisers.
“This year, global online ad spending is expected to reach $49.5 billion, up 22 percent over last year, according to the research firm eMarketer.”
Schmidt said the collaboration, which he highlighted was not exclusive, will be of equal benefit to Google, as understanding the creative needs of Publicis’ clients will enable Google to provide the best technical solutions. It will work with Publicis on everything from individual campaigns to using the most effective technology at its media buying arm.
“Google is focused on the technical and far removed from the creative. When we go and see advertisers, this collaboration will give us a much better understanding of their needs,” said Schmidt, who highlighted the “similar corporate cultures” at Publicis and Google.
Lévy said current analytical methods were not enough to help agencies get to the right audiences on the Web, assess the impact of their ads and see a return on investment.
Lévy has long extolled the advantages of digital advertising, which can personalize and deliver marketing messages with more detail and accuracy than mass media.
It also follows a buying spree last year which saw Internet and technology powerhouses such as Google, Yahoo or Microsoft snap up several leading Internet ad agencies.
A year ago, Publicis spent $1.3 billion to purchase Digitas, which was the largest independent digital ad agency at the time. AQuantive was the second-largest, before Microsoft acquired that company for $6 billion in May.
Google itself is still seeking European Union approval for its $3.1 billion purchase of DoubleClick, first proposed last April. Schmidt said that purchase would continue alongside any Publicis partnership.
Collaboration with Google also reflects Lévy’s view of Internet heavyweights such as Google as partners, a view that diverges from some other industry ad executives.
Whatever it is, it sounds like Lévy shares none of the angst that other traditional ad agency execs feel about Google: “Google is not a short-term friend and a long-term enemy. It is a real partner.”
Schmidt and Lévy said they decided to make their announcement ahead of the World Economic Forum in Davos, citing the event’s chosen theme of collaborative innovation.
Schmidt, who will this week be seeing WPP chief executive Sir Martin Sorrell at Davos, could eventually announce a similar initiative with the British advertising group.