Google Tightening Its Belt?

    October 14, 2008
    WebProNews Staff

Possibly rhetoric serving two purposes: an endorsement of smart fiscal management and management of Wall St. analyst expectations. Google’s VP of Sales, Tim Armstrong made a seemingly off-the-cuff remark about closely watching the economy while “making sure our expenses and revenue are very much aligned.”

You might think Google was pretty concerned about the state of things, overall and at home, that Google is pulling up the drawbridge and closing the castle for a while. Or it could’ve been typical corporate smoke, pandering to a group of advertisers dealing with their hunting areas being reduced to firing ranges.

Definitely that group of travel advertisers feels their ropes are shortening, their paths are narrowing, their nets are shrinking, their pools are draining—give me minute and I’ll think of more metaphors for dwindling market demand—their lines getting longer at not-even-close-to-all-you-can-eat buffets.

Makes for a perfect lead-in to a pitch about better targeting and return on investment, don’t’cha think? Ad Age took it to mean Google was battening down the hatches against the Mongolian hordes. And maybe they are. Things have been looking rough out there—GOOG is hanging out just over $360, about half the peak—and Thursday they tell us how Q3 went.
Doing better than expected could be good for a quick cash surge, and why not?  Reason would suggest business has been good. Even if there had been fewer overall advertisers and/or reduced budgets—there weren’t—Google keeps sucking up enough market share from the competition it’s bound to make up for it. Though not immune to rough market conditions, with increasing market share, better targeting, more channels, more advertisers looking to be efficient with their ad money, Christmas, and big name retailers expected to be the only ones with heavy enough pockets to maintain and even increase their advertising, you’ve got a recipe for a decent Q4, at least from Google’s perspective.

After all, when ad budgets are tight, where they gonna go? TV? The Radio? Not likely.

But no matter what, making sure your spending is aligned with your income is safe and sound advice, even at a sales meeting.