It is a bit weird to write what I am going to, using Google's platform. This is something I'll have to think about… But anyway… If you read "Haaretz" today, you are certain that it is a very big, even historical, date – Google is coming to Israel! Or as it was also phrased: "Google is coming to take its share of the Israeli advertisement market".
Actually Google announced opening of an Israeli branch a few months ago, but yesterday they held their first ever press conference here. "Haaretz" dedicated four(!) pages covering the event and looking on it I couldn't help myself but wondering why?
Except for the fact that the articles recycled already known information about Google again and again, it focused on the (already existing?) tension between Google and the institutionalized advertising. From a title like: "
Google is coming to take its share" (
EN version) you are getting a sense that Google will revolutionize the advertising industry in Israel - no more and no less. The veteran advertising agencies are shaking from the thought that Google will push them off the market making them irrelevant. Another article, was titled in Hebrew: "
The advertising agencies are sending Google a clear message: if you want to make money – work with us" (
EN version). Reading that I remember the “offer he couldn’t refuse” from the “God Father”. The most amusing statement quoted was by Yanon Landenberg of "Ideologic". He explained how important the established advertising agencies are, for (only?) they have the knowledge that will allow an effective match between search terms and advertising-worth results. Another article, by
Eitan Avirel (
EN version), explained how revolutionary Google's entry is for it will make advertising more transparent (and thus more cost-efficient) for the advertiser.
And again, reading all the articles, I couldn't help myself, but thinking what the all fuss is about. Maybe I do not understand something? Particularly being kind of an Internet junky, how come I fail to appreciate the great revolution happening in front of my eyes? Somehow these thoughts reminded me of the times I worked in a VC during the bubble days. I had the same, "dumb" questions back then, but I didn't dare to sound them thinking that I lack the experience to see the entire picture. Thinking back, the naïve questions I had were in place, so now I am trying to raise them again even if only in a blog. Moreover, today I do have a bit more experience to be able to put things in proportion, which again urges me to ask these questions.
The first question rises about the "revolutionarily effect" of the model. There is no doubt that Google's Adword and Adsense are interesting models for online marketing and they apparently work. However, to claim that they revolutionize online advertisement is an exaggeration in my eyes. The entire branch of online advertising is no more than a decade old. During that decade we all could see that simply copying offline advertising strategies online doesn't work and since then the industry was looking for workable models (actually not only in advertising). The process is accompanied by consciously, and I think to a great extend artificially, encouraged hype around the online advertising. The veteran advertising agencies continued playing the same game online trying to lock the web's profitability on them, just as it worked with television (thinking about it, this idea is pretty similar to what Schiller is saying). However, no equilibrium was reached yet, and the industry is still looking for workable models. But the media seem to enter the bubble mode again and comparative institutionalization of the dot.com industries gives more fuel for an exaggerated coverage of every sign of normalization. So, how can you revolutionize something that was not established yet? There is no such a things as an established online advertisement industry yet, so what is the contribution of such coverage?
At the same time it seems like the shake of the dot.com bubble was so strong that the related industries are looking now for some kind of tranquility which will allow them making money without too much crises. Isn't this discourse similar of an "austere strategy" when the industry with the help of media is hiding its head in the sand refusing to learn the trends and adjust to changes? Google has found one profit model that works in the new industry and this is great. Shouldn't this be learned, applied and further developed? In my eyes these are rhetorical questions and I do have unhealthy flashback from the early 2000's thinking about this.
Another point helping to put things in proportion is thinking about the relative size of the online advertisement compared to the total size of the industry. According to various news reports online advertising in Israel accounts for 5-7% of the entire share of the advertising industry, which is estimated around US $805-859 millions. Although it enjoys the fastest growing rates (around 60-70% in 2005), how can it endanger (or revolutionize) the established advertising agencies? Is it me, or the entire issue is way blown out of the proportion? Add on this a very simple fact that only about half of the Israeli population has access to the Internet and you see yet another question mark on the issue of Google-revolution.
Regardless to what is said above, I had another thought I couldn't shake off. It was a great similarity of the treatment Google's opening got and that gained to the visit of Bill Gates a few months ago. Is Google already the next Microsoft? Or it is only in the eyes of the newspapers? Or one particular newspaper? Anyway, I put the paper aside with a weird and unpleasant feeling…
