Nikesh Arora, Senior Vice President and Chief Business Officer of Google, spoke to Durga Raghunath, Vice President Products and Executive News Producer of Firstpost, and Anant Rangaswami, Editor, Storyboard, about the innovations needed in the digital space, monetising and Google’s philosophy. And guess what? Arora gave Firstpost a “walkthrough” with his Google Glass. (Read the first part of the interview here)
What are the big opportunities that we in India are not seeing on the internet?
Well, it goes back to the consumer problem, right? If you look at the age demographics around the world, India has one of the most favourable age demographics in the world in terms of young population and I think we are going to have the largest youth population in the world in the next many years. So, if that’s true, they are very technologically savvy; they are right up there. What we need is to make sure is that there is enough infrastructure to support the aspirations of all these people. If there is infrastructure, then there is no reason that 300 million, 400 million, 500 million people shouldn’t be watching stuff on their phone, should be using broadband at home.
We have the ability, we have the consumer demand and I think what we need to do is create supply. If that infrastructure gets fixed, all these opportunities open themselves up. What is strangling or gate keeping all this innovation is the lack of infrastructure.
In India, by and large, your branding is trade centric, not so consumer facing, while abroad you do a lot of consumer facing advertising.
There are two different points here. One is the notion of consumer facing branding itself. How much do you do and how much should you do? The second question is Google specific in terms of why do we spend more money in certain parts of the world versus the other parts. The second is more of an attack on the reasons depending upon the state of the evolution, the market, how much money do we want to spend in the market, what is happening, etc.
So, if infrastructure was going gangbusters in this country, I might spend more money to try and keep consumers engaged. But we don’t seem to have issues where consumers are not choosing our services in this market. I think there is another broader point there. Remember our services are on the web and are digital, so consumers can interact with them right away. For us, it makes a lot of sense to target consumers, who are in the space. It’s very hard to sell Google search to somebody who doesn’t have a phone, a computer or a laptop, or a tablet. So, I want to be where they are online, right? I think we try and concentrate our brand name in areas where we can address the consumers which is mostly in the digital space. Sometimes for competition reasons, for brand awareness, for certain markets where we are late on our services, we have to rely on traditional consumer media, which we do.
After spending an extraordinary amount of time with CEOs of advertising agencies, media agencies and trying to understand whether they are getting digital, it seems there are still in the dark.
I’ll tell you what: there are some very savvy publishers in this market.
Sure. But I’m talking about the big ones here, big creative agencies and there is an overlap now. Somehow it became only digital agencies and media agencies who got digital, the creative agencies didn’t.
See, I think that challenge is not specific to India. We are noticing that around the world. The first wave of digital advertising has been a wave of what we call performance advertising which is: I want more people in my store, I want more clicks, I want more people to buy my goods and services, my tickets, my products on the internet and it is very measurable to your earlier point. I spend money; I see how many clicks I get, I see how many converted into orders, I therefore understand the ROI of my spend and that’s what people have been doing from an advertising point of view.
But this is not a phenomenon that goes away. This is where consumers are spending more and more time. I need to figure out how to start engaging with my brand, learning about my brand. Now, brand engagement is not about saying “click here to buy something cheap” or “click here to come to my store” or “click here to play a game”. Brand engagement is about getting people excited about your brand, getting them to understand the brand attributes and brand values. And that happens in the creative agency. So, given that digital media is not as homogenous as TV – TV is a slot and you understand TV – digital media could be a social networking site, could be a search engine, could be YouTube, could be contextual advertising.
So suddenly, when you are a creative guy you have to start thinking about for example, there is a car company which has a customized car campaign which people engage with. So you have engaging with my brand, you could design your car to some degree and every car is an individual expression of yourself. Now, that requires the creative guy to think right off the beginning, “Should I put that into a search campaign with Google rather than to a website?” Having a YouTube video which hangs off it, and maybe create a community on Twitter to engage them into all of this stuff or on Google Plus. So, that requires a whole different thought process in the creative process, as opposed to saying “Let me star two very big Bollywood actors and actresses into a video and have them run around and make a video with my car.”
When you look at monetization, there is a point in the product cycle when you say “Okay, this is good…”
Time to make money?
Yes, time to make money.
That’s my job. That’s what I do, yes.
I know you take that call on various products across Google. Is there a broad philosophy about approaching different kinds of products? Something as innovative as Google would ask that has never been done before and could change the way you look at information and content that can interact?
No pun intended.
No pun intended, yes.
It is going to change the way you look at information
And then, there is the regional market in India, for instance, which requires a lot of patience. So how do you weigh some of these things?
Well, I think it is fair to say that, when you live in Silicon Valley you learn a few things. And my learning has been that companies have to lead their products because users buy products. They don’t buy companies, they do not buy monetization. Users buy products. Whether you are a hardware company or whether you are a software business, users engage with your product. So your product has to be good and the users have to like your product.
If for example, you build a beautiful product, price it right, do the right marketing for it, and nobody buys it, all the other stuff to waste. So, our point of view is that “Let’s create great products, let’s get users to use them.” As users use them, we will figure out how the product is evolving, whether there is opportunity to make money or not.
For example, Google Search was being developed by Larry Page and Sergey Brin for three or four years before they had the first advertisement and they spent the first four years getting a lot more users excited about the product and about using it.
We have spent lots of money and years on Google Maps and people are using it. We like the fact that they are using it and we are slowly working on monetizing it. It has been five to seven years before we started thinking about making money out of these things. But we are pretty sure that it is an unequal service.
When we brought YouTube, for the first three or four years we did not have any advertising sales focusing on it, we just made sure that YouTube had the right infrastructure, people would use it, and they had the right content on it and now I think it is the second-largest search engine in the world.
Now we can spend time making lots of monetization attempts on it. So, we take a more long term view on when we are going to making money, we go with the notion of creating very great products, getting a lot of consumers to access that product and you know, billion is a good start… to get a billion people around the world, you make a dollar from each of them… you make a billion dollars. You get ten million users; you need to make a lot of money from ten million users to make a billion dollars. So, I think that is the philosophy on how we won a lot of users. Once you have those users, you can figure out how to make money from with those users.
But that is not the primary focus. That is not where we start, which makes my job somewhat hard but that’s the fun of it.
Last question. Do you own Google Glass?
I have one here right here. Yes, I have.
Can you walk us through?
I can walk you through. Look, at the end of the day what’s fascinating is that our founders Larry Page and Sergey Brin to “Think 10x, as opposed to 10%”. If you think about some radical way of changing things, where you want a 1000% improvement on them, so 10 times the improvement, you’re more likely to innovate, because there are going to be a lot less people working on it.
So therefore you have a chance to success and if you aim at 10x and if you end up at three x or four x, that is a pretty good start. Because you only try and improve something by 10% and you end up at three percent, which is not very exciting. So part of it was a challenge on how can we get all that computing into phone factor that can sit above your eye. And it can be useful. I think what is fascinating is that as public, you have seen that the device now probably has as much computing and processing capability as the first PCXT or PC ATI used to program 20 years ago. Or maybe even more, probably more. But it has a camera, it has the ability to let me see my email, my text and I think the plan right now is to give away a set of few thousand of those to get people who want to develop on that platform to come up with new interesting ways of using it. Because we can think of new ways, but we really want to see how the creativity of lots and lots of people are unleashed.
Right now it has very basic things – it allows me to check my emails, my text; I can take a picture and post it on Google Plus, I can go through search and see things over there. It has a camera, it has computing, it has display capabilities and it is right above my eye so it is not distracting. But just think of the possibilities. The camera can be used in a multiple ways to recognise things in the long term; the camera can be used to give you perspective of a person, you know, interesting examples of surgeons wearing it, or there is an expert somewhere out in the fields and he has got Google Glass and somebody’s guiding him through the voice interface. Once you create a platform, you create that opportunity. There are so many ways you could use that. So, I think that creativity is yet to be unleashed on that device. But I think that is going to be interesting and the good news is definitely going to change something.
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