WPP, Google Cooperate on Research
Oct 28, 2008
NEW YORK WPP Group and Google are joining together for a program designed to spur academic research to prove how Web marketing can help brands.
The $4.6 million joint project, funded equally by the companies, will award grants to academic research that will prove the effectiveness of online marketing in changing customer behavior. It will tap customer data from WPP’s The Kantar Group as well as search behavior collected by Google. The research program is slated to run three years, with a dozen grants in the first year.
The purpose of the program is to remedy the often-cited statistic that while consumers spend 30 percent of their time online, advertisers devote just 11 percent of budgets there. That gap is not just a result of agency and advertiser inertia, WPP Digital CEO Mark Read said.
“The online people have perpetuated the myth that everything is more measurable there, but some parts are more measurable offline,” he said. “The aim is to make us smarter, our clients smarter and help our clients move their budgets online more quickly.”
That means striking a deal with Google, which WPP has eyed warily. WPP CEO Martin Sorrell famously branded it as a “frenemy,” and WPP has been a vocal critic of Google on several fronts, including its deal to provide search ads to Yahoo! and instances of Google bypassing WPP agencies to deal directly with clients.
“Calling someone a frenemy doesn’t mean you don’t want to work with them,” Read said. “We’ve always said we want to work with them. We’ve always categorized it as a complicated relationship.”
The deal with Google is one of several initiatives the two companies have, according to Read, including presenting jointly to clients. (Google has a more formal arrangement with WPP rival Publicis Groupe.) The grants program idea came about after a series of discussions between Google’s president of advertising operations for the Americas, Tim Armstrong, and WPP executives.
“Tim and I and [GroupM CEO] Rob Norman sat down and thought of what we could do that’s concrete — and that doesn’t involve eating lunch with each other in each other’s canteens,” Read said, referring to the employee-exchange program initiated between Publicis and Google.
Instead, the executives decided to address the concerns of brands in areas like packaged goods that they cannot adequately measure online marketing’s interplay with their offline activities and ultimate effect on sales, Read said. Google chief economist Hal Varian, Harvard Business School dean and WPP director John Quelch and Massachusetts Institute of Technology business school professor Glen Urban oversee the program.
Read freely admitted the companies continue to have their differences, but in situations like this have aligned interests.
“I wouldn’t overexaggerate it,” Read said of the tensions between the companies. “Google recognizes to build their business they need to have good relationships with agencies.”