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Google pitches digital ads amid the slowdown

Google is telling clients that it can help them beat the recession and is urging them not to turn their backs on digital advertising as the economy slumps, according to its most senior executive outside the US.

Nikesh Arora, the senior vice-president in charge of Google’s operations in Europe, the Middle East and Africa, will tell an Ofcom conference in London on Thursday that the internet cannot make businesses recession-proof, but it can help make them more recession-resistant.

In an interview with the Financial Times, Mr Arora said: “We are making a very explicit pitch to clients about using the internet to speed up in a slowdown. We want to make sure people don’t sacrifice the digital imperative because of other issues in their business.”

Although Google reported robust third quarter earnings last month, cuts to marketing budgets are beginning to weigh on digital advertising, once seen as almost impervious to spending constraints.

Analysts at Citigroup last week highlighted the strength of search engine advertising – Google’s core business – but noted that banner ads, classifieds and lead generation activities were all showing signs of weakness online.

Mr Arora admitted that advertisers’ experimentation with some newer online techniques “is going to have to take a back seat” as budgets tighten, but said many businesses had the scope to optimise and reallocate their marketing spending for greater returns.

Three trends – a growing online audience, that audience’s growing trust in the internet and the rise in e-commerce – would make the online sector more resilient, Mr Arora said, although he admitted “that’s not to say if there’s a huge cut in advertising spending it’s not going to filter through to all forms of advertising”.

Mr Arora will tell Thursday’s conference that the internet has transformed the economy since previous recessions, cutting the costs of logistics, distribution and service and allowing businesses of all sizes to reach national and international markets, even with tight advertising budgets.

Google has stepped up its efforts to persuade retailers and other clients to use its website optimisation and analytics tools to improve the rate of online visitors they convert to buyers.

The group is also directing executives towards its “insights for seach” tool, which has allowed them to spot trends in what consumers are looking for, such as a jump in searches for coupons.

Despite a levelling off in online retail sales in the US, Mr Arora attributed the continued growth in online commerce in Europe to local retailers’ decision to keep spending on their e-commerce activities even as high street sales struggle.

Источник: Financial Times

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