Google yesterday surprised the world with the news it is changing the name of its holding company to Alphabet. M&M Global considers the possible ramifications for brands and agencies.
Google yesterday surprised the world with the news that it was changing the name of its holding company to Alphabet, with the original name used only to describe its search business subsidiary.
The change in name reflects Google’s growing diversity of business types within its holding group, which span medical tech, driverless cars and cardboard VR headsets.
Some media commentators have written about the restructure with hyperbole, enthusing about the creation of a new company. But in reality, how dramatic is the formation of Alphabet?
It’s a point raised by Chris Dobson, executive chairman of Exchange Lab, who says: “Google’s standalone digital media focus is unlikely to have any impact on how it works with brands and partners as Google as an entity isn’t changing.”
But for many, Google’s hiving off of its search business into a separate subsidiary signifies greater focus on advertising services and less distraction from the likes of Google Glass and driverless cars.
Robert Lloyd, head of owned and earned at Reprise Media, a digital agency part of IPG Mediabrands, points out that many of Google’s non-ad projects were primarily funded by Google’s ad revenues – “the money tree which could become easily distracted by these ventures.”
For Starcom Mediavest managing partner for digital Isabelle Baas, yesterday marked “good news” for a media industry in need of a “strong, more singular focused advertising business” ready to innovate and set apart from its growing competition. She argues that it strips Google to its core, offloading some of the peripheral add-on solutions for advertisers.
Her point is echoed by Stefan Bardega, chief digital officer of ZenithOptimedia, who says Google can now continue aiming its occasionally wacky “moonshots” and fail without impacting the core business of advertising.
Yesterday marked “good news” for a media industry in need of a “strong, more singular focused advertising business” ready to innovate and set apart from its growing competition
With Sundar Pichai at the helm of Google and the tighter focus on its advertising business, does the news bring with it the prospect of more brands dealing direct with Google, phasing out the roles of media agencies, programmatic companies and DSPs?
Exchange Lab’s Dobson reckons it remains business as usual and is “unlikely to see brands go direct to Google over an agency any more than they would have before”.
But for Andy Kahl, director of research at ad tech company Sizmek, Google as a platform is designed to “not only provide ad management services” but to sell its own media. “The reorganisation does suggest that this is Google’s strategy for the foreseeable future,” he says.
Clearly, with yesterday’s announcement still resonating (and given the scantness of detail it contained), what Alphabet is planning is characterised by speculation rather than certainty.
Read here in full the reactions of senior media and ad technology experts, and how they envisage the future for Google, advertisers and agencies.