One minor misconception is that Google doesn’t spend money on advertising. This is an excuse I hear from many prospects on why they don’t need to advertise or market their business to succeed. For some, minimal or no marketing may be required, but I’ve found that most of these types of businesses keep their success limited to either geographic or size. (Often their “excuse” is they don’t want to get too big that it’s not manageable). I digress. This is another topic for another time. The point here is Google does spend money on advertising. In 2010, they spent almost $30 million in measured media advertising. That isn’t the real shocker. To me, the real point of difference is for such a powerhouse brand with all that cash just sitting around, is they have chosen to utilize a number of small advertising agencies and creative shops to handle their marketing. Microsoft and Yahoo have both hired mega agencies (J. Walter Thompson and Goodby Silverstein & Partners respectively). Google has, instead, taken a different route than their rivals. They have elected to work with smaller firms.
Why is that and is it a risk for a mega-brand to work with much smaller companies? Here are a few reasons of why it may make good business sense for Google:
• Smaller agencies are more nimble – In the world of the internet, speed is everything. Going to market and responding to market changes quickly is paramount in the online world. A large, bureaucratic marketing agency may not be able to keep up with the “turn on a dime” culture needed to service a company like Google. Smaller agencies can better keep up with online brands and market currents.
• Google wants to recapture the entrepreneurial spirit – They are trying to get back to the spirit of the “up-start” company when it was Larry and Sergey in a rented garage making their way in the world. As with most innovative companies, when they get to become a large corporation, the spirit that once helped fuel and define them, seems to give way to being conservative, slow-moving, and too careful so not to upset the stock market. These smaller agencies bring “let’s try this crazy thing” spirit in their creative ideas backed with passion. In their eyes, taking no risk is the riskiest thing to do.
• Google is still trying to befriend the advertising community – The ad community still sees Google as a frienemy. Google sees themselves as a partner. To help polish that image, they are trying to spread the wealth by employing a number of smaller advertising agencies to be on their roster and they are still looking for more. They have stated they are increasing their marketing efforts and will need to find additional ad partners to help with the work load.
Being a smaller advertising agency, this is great news for a few reasons. One is the recognition that smaller agencies have the creative and strategic firepower that the larger big-box agencies have. Second, they can come with competitive advantages of speed with less corporate layers. One more reason is smaller agencies tend to take more creative risks because they need to be noticed. They aren’t afraid of not following the crowd. These qualities are perfect for any company looking to break out from being a commodity and being a loved brand. Maybe small is the new big.