ClickZ’s Rebecca Lieb provides more specifics from Google’s event in NY yesterday (see: Google Sees Ad Cutbacks–But Not on Google). It’s hard to confidently translate such anecdotes into big-picture trends, but they suggest that, on balance, Google’s scarfing up of the world’s ad spending has a long way to go.
For example, as you read E*Trade CMO Nick Utton’s comments*, consider that E*Trade is an early adopter and that the bulk of Google’s clients are likely where E*Trade was three years ago: just getting started.
Nick Utten is CMO of E-Trade, but he jokingly (and repeatedly) refers to his company as “gTrade.” Three years ago, “E-Trade spent their last dollars online,” Utten explains. Today, “our first dollars go online. Search is a major part of that, and we’re not even close to the top of our spend.” (More…)
Utton, who earlier held CMO positions at Revlon and MasterCard, doesn’t limit his Google-related spending to search. He also buys keyword advertising, campaigns on YouTube, and ads in Google’s display advertising network and participates in Google’s contextual beta tests in both television and radio advertising….
As they’re not close to their top of spend on Google, Utton says, “we’ll keep spending more online until it plateaus out.” And sure, E-Trade’s buying inventory and search terms on Yahoo and MSN as well, he confirmed… “But frankly, they’re not really even in the race.”
(Hear that, Yahoo and Microsoft? “Not really even in the race.”) Meanwhile, Google’s head of sales Tim Armstrong kept preaching the mantra that spending on Google is not “advertising”–it’s a cost of goods sold.
Rather than picking a year-on-year or quarter-on-quarter number, [Armstrong would] like advertisers to view their Google buys as an operational expense, “like making a movie or building a dealership.”
And Google wants its advertisers to advertise more. A lot more. Say, about a thousand times more.
As an example, he cites an unnamed computer manufacturer and Google client who, a few years ago, ran campaigns for 8 to 12 products annually. Today, that same company advertises 12,000 products and services, according to Armstrong. The idea, he says, is businesses can make all their assets available to all consumers all the time, and in doing so, connect only with interested users.
“You don’t need to go into a fixed budgetary cycle,” Armstrong argues. Instead, advertisers must learn…how their budgets fluctuate with consumer-interest cycles.
*Correction: We and ClickZ originally misspelled “Utton”.