Google vs. Google
The tech giant needs to balance AI with creators - while maybe distance itself from Meta
Google finds itself at an interesting inflection point.
The company very much wants to be perceived as a leader in AI, despite seemingly being caught flat-footed by the rise of ChatGPT
To do so, the search giant is pushing AI-driven, conversational search onto it’s core product, risking blowing up its incredibly lucrative search advertising business
At the same time, it’s got YouTube, which is quickly becoming dominant in television, and essentially global culture. And while that platform will surely be impacted by AI, YouTube’s super power is its humanity
That’s a tricky needle to thread. As Sean Downey, head of Google's advertising business for the Americas & Global Partners put it during a press conference in Cannes last week, “AI is great. Humanity is better.”
Downey was both talking up the power of creators and their connections with viewers - while also perhaps taking a not so subtle shot at Meta, which has scared agencies and brands of late by offering to do all their work for them.
“We’re at this interesting moment,” said John Terrana, Global Chief Media Officer at VaynerMedia on my podcast this week. “At Cannes for example, a lot of chatter around Google overall. A lot of clients want this holistic Google strategy, and they’re saying, “What is happening with my search strategy?’ So you might see this share shift within, and YouTube seems like a more defensible moat.”
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YouTube’s business is more than defensible at the moment, as it pulled in nearly $9 billion in Q1. That doesn’t mean it couldn’t be a whole lot bigger. As Terrana noted, the business is still “two thirds the size of Instagram,” he said. In his view, YouTube needs to become more adept at serving lower funnel advertisers, while also making it easier for brands to spend with creators. “Access is being democratized,” he said. “There are so many good tech platforms that can help you source creators. It’s still very campaign-by-campaign.”
Google’s big Cannes announcement was OpenCall, which is designed to make it easier for brands to find suitable creators and get briefs moving more quickly. I asked Downey about this during a taping of my podcast at Google Beach in Cannes (both my Downey and Terrana chat were part of a year-long series on the YouTube ecosystem with my partners at VuePlanner).
“I think our role is pretty clear,” Downey said. “We're creating an incredible environment. I think that's our best value proposition that we have for the marketplace. Increasingly what we need to do better is make sure that the creators and the brands find each other. We have this great surface where they can really have that authenticity come through, that voice come through and it's really about just connecting the two of them and letting them have a great relationship.”
At least one top creator was thrilled. “I think it’s the one thing that YouTube was missing,” said Haley Kalil, a mega creator who I’d definitely had heard of before last week.
Regardless, it’s an interesting position for Google to play this much of a direct role in playing matchmaker on YouTube, without having to get too involved. The company has gone back and forth over the years - at one point letting the MCNs (multichannel networks) sort of play YouTube ad networks.
Then in 2016, Google acquired Famebit, which was essentially a platform aimed at connecting brands and creators. In 2023, that group - then called BrandConnect - was gutted during a round of layoffs.
Now Google seems to be playing a more activist role - within limits. I’ve always wondered when and if YouTube might want to get a piece of the growing brand integration budgets that go directly to creators. For now, Downey says the system works for all parties.
“It's a great flywheel,” he told me. “It's good for everyone. Consumers get really great content, they get really great recommendations that they care about. That's important because ultimately we want people to enjoy the platform and get a lot of value out of it because they keep coming back, and that creates more opportunity for us at the end of the day, more opportunity for brands.”
And of course, hopefully those brands keep buying lots of pre-rolls. Especially if the search ad business starts to slip a bit.