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Online advertising continues to outpace growth in other forms of media, and is projected by PricewaterhouseCoopers to increase at a compounded annual rate of 23.5% in Canada over the next few years. Few companies have had as big an impact on the field as Google, and the Mountain View, Calif. — based business will continue to shape the industry for years to come. Tim Armstrong, Google's president of advertising and commerce for North America, sat down with Canadian Business staff writer Calvin Leung to discuss the latest on YouTube and emerging trends in the rapidly changing online advertising business.
Google has made several changes to YouTube, since buying it for US$1.65 billion in 2006. Now there are ads on the site, and your company has removed copyrighted content. Have those changes affected YouTube's popularity?
We've seen exceptionally strong traffic growth both in Canada and across the globe.
That seems counterintuitive. One of the biggest appeals of YouTube is catching the episode of TV you missed, and who wants to watch ads?
When you look at the growth in traffic on YouTube, the vast majority is coming from people viewing user-generated content. And there are more videos getting uploaded over time. We spent 2007 understanding the YouTube community and what type of advertising would work best. In our testing, we found there was a correlation between how much an ad interrupted the consumer experience and how much traffic you kept.
Are your advertisers reluctant to associate their brands with content that was created in someone's basement?
We've been most successful with connecting advertisers with professional content made by large and medium-sized media companies. Our advertisers feel most comfortable associating with that. Once they get involved with premium content, I think they'll start to expand to other content on YouTube. There are tens of millions of people producing content, and some of these individuals are not only really creative but also popular among people that fit a brand.
There has been a lot of hype around cloud computing, in which people store their data and access applications online rather than on their personal computer. How much has Google embraced this concept?
Our employees store their work information, and things they interact with everyday, online. To be able to access your information anywhere, anytime really frees you up as an individual. It also makes sharing easier. At Google and other companies, people are creating spreadsheets or presentations virtually together in real time. We were excited about the cloud a few years ago; now we're living in it.
What is Google doing to ensure online data is secure?
First, we collect the least amount of information possible. Second, we take security very seriously, since we have all of our employee and sensitive information in the cloud. We're expecting people want the same level of protection we have, or more.
What are some other emerging trends you're seeing in Internet advertising?
Social networking will be a big part of online advertising in the future. There's also going to be a lot more analytics beneath Internet advertising. It's still hard to measure how different types of online ads and targeting techniques affect a consumer's perception of a brand. We're also excited about mobile opportunities.
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