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Simple as ABC: Could Alphabet Pave the Way to a Google Advertising Empire?



Laura Swinton looks at Larry Page and Sergey Brin’s new holding company and asks if it heralds ad-pocalypse

Simple as ABC: Could Alphabet Pave the Way to a Google Advertising Empire?

The big news in tech this week is that Google is no longer the Big Boy of Silicon Valley. Larry and Sergey have created a gigantic new holding company called Alphabet (proof, were it needed, that their ambitions cover the A to Z of everything) and Google will be just one, pretty large, subsidiary company. The motivations for the move seem obvious enough: it should help protect profitable areas from those that are struggling; it broadens the company’s scope; and, finally, it’s probably a great excuse for some old fashioned slashing-and-burning of any deadwood bloating Google’s corporate structure. But could it also pave the way for a major push into the advertising industry?

That’s not to say that, to date, Google hasn’t already plonked itself right into the middle of adland. It has its ad sales operations, programmatic buying and data tech – and platforms like YouTube, Cardboard and even Android are catnip for creatives and brands alike. And then there are Google Creative Labs and The Brand Studio – in-house creative agencies and brand consultancy-type set ups that I’ve always suspected were ultimately limited in their potential. After all, while they’re super-cool if a client knows it definitely wants to do something solely on Google platforms, the lack of independence makes things stifling for brands that want to cast the net wider, experiment with media channels or approach things in a more holistic, integrated fashion. Aside from particular projects or very specific circumstances, most of the times brands are going to forgo the Google glamour for their big campaigns.

Until now – at least that’s my speculation. As part of the restructuring, ad sales are going to remain in the Google fold, which is pretty obvious. But Alphabet will also be freed up to buy up or start up creative and even media agencies if it so desires – and judging by Google’s Cannes presence I’d guess that it does indeed desire it. Any creative, digital, media or brand agencies that exist under the Alphabet umbrella, but separate to Google itself, should have a comforting figleaf of independence that could tempt brands across.

So far, most of the coverage of the birth of Alphabet has focused on Google’s new CEO (Sundar Pichai will take the reins as Larry Page and Sergey Brin ascend to the top of Alphabet), the fact that Google will now operate separately from businesses units such as Nest (the Internet of Things/connected home business), Fiber (high speed Internet), and X Labs (self-driving cars, Glass and all the other moonshots). The ad industry implications have yet to be properly examined.

But we’re such a neurotic and self-regarding lot that it won’t be long until we’re making the Alphabet news All About Us. There’s been much doom mongering about Google from holding companies and agencies over recent years (but not from DDB’s Amir Kassaei, who told LBB last year that he reckons Google is more or less doomed). But the Alphabet move might very well be the catalyst that triggers the much-prophesised ad-pocalypse. 

Or not. All I’m saying is that if Alphabet start a WPP-esque agency buying spree, I called it.

For a slightly more upbeat assessment of the Alphabet news, check out this piece from ZenithOptimedia's Chief Digital Officer Stefan Bardega.

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LBB Editorial, Wed, 12 Aug 2015 16:20:25 GMT