In Sir Martin Sorrell’s frenemy book, it would appear Google is wandering back into enemy territory.
The combination of “friend” and “enemy” has been one of the quotable WPP chief’s more enduring buzzwords since he adopted it several years ago to describe Google’s frequent venturing into work traditionally done by advertising and media-buying agencies like WPP’s.
Last year, in his annual report, Sir Martin suggested Google had become a “friendlier frenemy” while noting that it remained a “short-term friend, long-term foe”.
But with its acquisition of Motorola Mobility – and Moto’s large cable-TV set-top box business – Google is concerning Sir Martin once again.
On WPP’s results call on Wednesday, Bernstein media analyst Claudio Aspesi pointed out that Google might be able to collect new kinds of TV-viewing data if its technology made its way into Motorola’s set-top boxes. Asked if that would make it a bigger threat to media agencies, Sir Martin replied:
“It is a worry. I don’t think you can dismiss that, on the one hand. On the other hand, they have a lot to do [handling the acquisition]… It could be that they continue to amass data. It could be a threat or it could be an opportunity. It is a potential competitive threat that affects Nielsen and Arbitron and all sorts of other businesses as well.”
Talking to the FT afterwards, Sir Martin added:
“I don’t think it’s a new question. Google’s access to data has never been questioned – or their desire to develop further access to data. It has come into stark relief because they are buying a major handset manufacturer…
“Everybody is nervous about what is their ulterior motive and where are they going in the long run. But they are very responsive and bright people and very sales oriented.”
Elsewhere on WPP’s results call, Sir Martin extolled the virtues of its “independent” online ad-serving business, 247 Real Media, and its accompanying new audience-buying platform, Xaxis. Where other advertising groups have been keen to leap into bed with Google, WPP believes that some advertisers prefer to keep their marketing technology separate from their media.
“One client… accepted the proposition that Google is probably a new-media owner masquerading as a technology company,” he noted.
A Google spokesperson said in response to Sir Martin’s remarks: “As we’ve only just announced our agreement to acquire Motorola Mobility, we don’t have detailed plans to share. Our two companies will continue to operate independently until the deal closes.”
Given it’s apparent focus on Motorola’s patents, Google may end up spinning off the set-top box business, but Mr Aspesi is right to point out that combined with its data about search and web-browsing habits, Google could create a very powerful platform if it started to collect more information about “offline” viewing too. If an advertiser can reach their audience by using this data to target their messages on TV, they may not need a media-agency advising them where best to allocate their budgets.
Both being in the advertising business, WPP and Google’s fates are more intertwined than this somewhat one-sided rivalry may suggest: both are at the mercy of the same clients’ ad budgets. But whereas Google has sometimes appeared to stray into WPP’s turf on a whim, Sir Martin has been fighting to move more of WPP’s business into the digital world for years, reaching around 30 per cent of its total revenues today.
