"Companies that are doing big traditional campaigns and invest loads of money, but that are weak in the internet, are throwing away money"

Friday, September 2, 2011

What was originally conceived as an internet search engine has become a ubiquitous presence that covers areas such as advertising, email, social media and e-commerce, and has even spawned its own verb.

The giant Google has spread worldwide, becoming a reference to most internet users in terms of being a service provider that supports diverse tools on one platform, accessible to ordinary users.

But Google does not stop there. The company is continuously developing new tools and applications to be in line with current trends, from mobile payment systems to applications similar to Twitter.

BNamericas spoke to Google Chile general manager Eduardo Pooley about the company's expansion in the region and the implementation of new technology, among other topics.

BNamericas: Google opened its Chile branch in January this year. What has been the main focus for the office?

Pooley: The main thing that we've been doing is hiring people. It's part of a string of new Google offices and is exclusively commercial. The IT development is done in other countries. The commercial office is to support the marketing and advertising sectors, focusing on companies that develop advertising, business and communications.

BNamericas: And how has the advertising been received by Chilean companies?

Pooley: It's been very good. The level of technology use in Chile is medium-high because we have good internet infrastructure - you can do tax payments online, home banking. There's a high level of internet usage, so companies are also using online marketing tools to get to their clients.

BNamericas: Are there some verticals that use these tools more than others?

Pooley: The key vertical here in Chile is tourism/travel. In the last couple of years, has anyone gone on a trip without first checking on the internet?

All companies related to hospitality and airlines know they have to be online. When someone is searching for the best holidays, that's the moment when your offer has to be visible. So tourism is number one worldwide.

The other is the retail market. Everything related to consumers, electronic goods, phones, computers - people search for them online before buying. We did a study where we saw that in Chile eight of 10 people who buy something in a shop - any product - they first check on the internet to make sure they're getting the best price and the best product, and [to see] other people's opinions. The moment people start searching online is when companies must have a presence, with their advertisements promoting the brand. When someone starts searching for a product, they might initially have a very clear idea about what they want specifically. However, during their search they find another product that maybe has the same qualities as the one they were initially looking for.

The impact of consumer opinions online is profound in the purchase decision, to the point that the searcher's original preconceptions about a product can be changed by reading a good or bad review of a product online.

Companies that are doing big traditional campaigns and that invest loads of money in TV, newspaper and radio ads, but that are weak in the internet, are throwing away many of their advertising resources. Because there might be another company with less investment in the traditional advertising that's winning business because it has a strong online presence.

BNamericas: So other than travel and retail, which other sectors does Google see strong growth potential?

Pooley: The financial sector. Although in Chile it's a bit less developed compared to other parts of the world, it's growing at a fast pace. Before there was this concept of going to the bank to get certain products, but people use the internet and check for interest rates or mortgages. The behavior here is the same as in the retail sector - users want to know what alternatives are available before buying.

BNamericas: Considering the internet boom, why do you think there are still areas in Chile, such as real estate, that still aren't as developed?

Pooley: The previous examples - retail, banking and travel - are the main advertisers in terms of volume. These are the companies that invest more in digital advertising. But there's the "long list" on which Google bases its business model. We have these big advertisers that invest heavily, but equally important is the long list of thousands of small advertisers who offer products and services, such as flowers, pizza deliveries, lessons, music for parties, handymen, etc. We have around 6,000 active companies in Chile as part of the long list. This shows that the verticals come from all sectors.

Now, coming back to your question, yes, it could be that certain sectors like real estate need more development. I'm not sure how are they operating. I think some agents are using the web. The same with the auto industry; more and more people are leaving the traditional ways and using the web to sell cars. But you need to be aware that people are using the internet to search for information regarding products - such as cars - on more than one portal to find the offers.

BNamericas: How much does a Chilean company invest in internet advertising?

Pooley: According to the Digital Media Association plus some estimation for Google, we think that a company invests between 5% and 6% of its marketing budget for digital campaigns in Chile.

BNamericas: And what about other nations?

Pooley: In the US, of all the advertising media available - TV, newspapers, street signs, point of sale, etc - 15% of their budget is spent on digital online advertising. The country that invests most in digital advertising is the UK, with almost 25%, higher than what they invest in TV and newspapers.

BNamericas: Google is offering different products. One of them is related to a payment system. When is it going to be available in Chile?

Pooley: Google is constantly innovating, and Wallet is a product that's still in the testing stage in the US. So there's no agenda because it's not a product with a calendar regarding when it will be launched. At the moment, it's in the trial period in some cities and in some stores. Depending on this, we'll see what happens.

This type of payment method is an upcoming trend, because it involves technology, security and availability that could be implemented anywhere. With this, you will be able to do payments using your mobile phone in places like the metro. The information carried in the phone will be the same as from your credit card. It has a unique ID that enables you to be recognized as you electronically make a secure payment.

BNamericas: What about Google+, which already has more than 20mn users worldwide. In which stage is this application at the moment?

Pooley: Similar to Google Wallet, this is in a test period; it hasn't been officially launched yet. It's open to social media users. This is not a trial period aimed only to testing its capacity, but also its functionality. We need to know what the user needs, what's the best way to interact with them. It's a product in development running in parallel to the trial period.

With this application, people can recommend to friends products or websites that they like. The idea behind it is that users can tag websites and products that they like, and then, in my group of friends from social networks, I can see their opinions about any product. It's not the same as ranking in the internet about, for example, the best camera on the market. You can apply this to songs, films, parties, etc.

Google is looking to transform internet into a social movement. This is not a private social network like other models where you have to log in and decide who I invite, what do I share and all of that. Internet is social, and that's how Google sees it.

BNamericas: But then, how will it work? How do you know who are your friends?

Pooley: Well, Google+ works by the users inviting their friends to be part of Google+, where I have a wall and I can chat to them or upload a video. But the difference is that I can also go to YouTube, upload a video I like and tag it in YouTube and that's it. So my friends from my network that I choose will know my preferences. It also works like Twitter, where I can post things so whoever is following me can read it. This is still in a trial period, and Google is in no hurry.

BNamericas: What's the next step in Google's expansion plan in the region, like the office in Chile that opened in January this year?

Pooley: Until last year, Google had offices only in Mexico, Brazil and Colombia, and from there we provided services to the rest of the countries in Latin America. For example, last year we had more than 3,000 active companies advertising in Google from Chile. But we didn't have an office here, because all that these companies needed was a credit card to open an account and then to create advertisements for the Chilean market. But there came a point where companies needed more support in terms of development, so we opened offices in Peru and Chile. That's the current stage. From these countries we provide to others: Peru covers Ecuador, Argentina covers Uruguay, Colombia covers Venezuela and so on.

BNamericas: But is Google planning on to open other offices in Latin America?

Pooley: Google is working to offer its services in the Caribbean and Central America, but from Colombia, because there are way too many countries and none is big enough to set up an office. Google is deploying and hiring people to do training courses to work with the main advertising companies from the region.

About Eduardo Pooley

Eduardo Pooley joined Google in January. He was previously general manager of Chilean financial daily Diario Financiero.

His experience includes regional business management applications from Microsoft Southern Cone, the marketing manager of Microsoft Chile, Diario Financiero business management, general manager of Decapack international movers, head of projects at Coca-Cola's bottling company and product manager for Apple Chile.

Throughout his career, Pooley has taught and lectured at universities and seminars. Additionally, he has served on the boards of various companies and organizations, such as Business Generation, IAB Chile, the Self-Regulation and Ethics Council (CONAR), PROhumana Foundation and Chile's National Press Association (ANP).